SOURCE: Continental Materials Corporation

October 03, 2016 12:56 ET

Continental Materials Corporation Reports Issuance of Partial Summary Judgment on Valco, Inc. Litigation

CHICAGO, IL--(Marketwired - October 03, 2016) - Continental Materials Corporation (NYSE MKT: CUO) (the "Company") today reported that on September 15, 2016 Partial Summary Judgment was issued regarding the Company's previously disclosed litigation, Continental Materials Corporation v. Valco, Inc., Civil Action No. 2014-cv-2510 filed in the United States District Court of the District of Colorado. The suit regards a sand and gravel lease between the Company and Valco, Inc. ("Valco") that calls for the payment of royalties over the life of the lease on an agreed 50,000,000 tons of sand and gravel reserves. In the suit, the Company sought, among other things, to reform the sand and gravel lease in regard to the agreed amount of sand and gravel reserves and to recover approximately $1,259,000 of royalty overpayments. The Company paid royalties on approximately 17,500,000 tons, including the overpayments, through the end of the third quarter of 2014. The Partial Summary Judgment resolved many of the Company's claims in Valco's favor, but the Company's claim for the return of royalty overpayments made during the statutorily allowed period is still pending. The Company and its legal counsel believe there are grounds to appeal the Partial Summary Judgment as the court improperly resolved factual issues that should have been decided by a jury. Though the Company believes there is a likelihood that the Partial Summary Judgment will be reversed on appeal, there can be no assurance that an appeal will result in reversal. The Company is considering whether any reserves are required to be recorded as a result of the Partial Summary Judgment.

CAUTIONARY STATEMENT -- Statements in this document that are not historical facts are forward-looking statements. It is important to note that the company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those suggested in the forward-looking statements is contained in the company's Annual Report on Form 10-K for the year ended January 2, 2016 filed with the Securities and Exchange Commission, as the same may be amended from time to time. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results and shareholder values of the company may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond the company's ability to control or predict. Shareholders are cautioned not to put undue reliance on forward-looking statements. In addition, the company does not have any intention or obligation to update forward-looking statements after the date hereof, even if new information, future events, or other circumstances have made them incorrect or misleading. For those statements, the company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Contact Information

    Mark S. Nichter
    (312) 541-7207