easyhome Ltd.

easyhome Ltd.

March 04, 2005 13:21 ET

easyhome Ltd. Announces a Settlement in Principle of Class Action


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: EASYHOME LTD.

TSX SYMBOL: EH

MARCH 4, 2005 - 13:21 ET

easyhome Ltd. Announces a Settlement in Principle of
Class Action

TORONTO, ONTARIO--(CCNMatthews - March 4, 2005) - easyhome Ltd. (TSX:EH)
announced today that subject to court approval it has settled a class
action lawsuit that was commenced in April, 2004 for the restitution of
rent and fees charged to easyhome customers, which were alleged to have
constituted interest charged in excess of the maximum rate prescribed by
the Criminal Code of Canada. The settlement is conditional upon the
lawsuit being certified by the Court as a class proceeding under the
Class Proceedings Act and as part of that process, the terms of
settlement being approved by the Court.

Under the terms of the proposed settlement, easyhome is to pay to the
Class $7.38 million in coupons which may be used to purchase easyhome
merchandise, be applied to existing easyhome rental agreements or used
after starting a new agreement. In addition, easyhome is to pay the
legal fees and costs of the Class, in an amount approved by the Court.
At this time, the Company has not calculated the ultimate cost of the
settlement as that is contingent upon how many coupons are redeemed and
in what form-that is, whether used to acquire merchandise, applied
against rent on existing rental agreements or applied against rent on
newly activated rental agreements. However, the company does expect the
final cost of the settlement to be less than the full settlement amount,
as rates of take-up and redemption of the coupons will likely be less
than 100%.

The Class members comprise all easyhome customers, outside of Quebec,
who purchased merchandise under an easyhome rental agreement, either at
the end of the lifetime of the rental agreement or pursuant to the early
pay-out option in the rental agreement. The company has estimated that
there are approximately 70,000 members of the Class.

A further term of the settlement is that easyhome Ltd. will revise the
structure of its rental agreements such that the difference between
pay-out amounts and the cash price of the company's merchandise cannot
be construed as being an interest charge in excess of the rate
prescribed in the Criminal Code of Canada. easyhome Ltd. is in the
rental business, and maintains that its agreements do not constitute the
advancement of credit so as to give rise to any rate of interest. The
settlement does not constitute any admission of liability by the
company. easyhome Ltd. does not expect that the changes to its rental
agreements will have any material impact on its business model.

David Ingram, President and CEO of easyhome, stated that "we remain
convinced that we are in the merchandise rental business, and that our
agreements do not include charges of any interest whatsoever.
Nonetheless, it made good business sense to avoid the expense, time and
distraction that this law suit created. We are very pleased to reach an
early and reasonable settlement and continue forward with the Company's
exciting growth plans."

The lawyers for the proposed class were Harvey T. Strosberg Q.C. and Jay
Strosberg of the Windsor law firm Sutts, Strosberg LLP. easyhome was
represented by Ronald G. Slaght Q.C. and Craig Martin of the Toronto law
firm Lenczner Slaght Royce Smith Griffin LLP.

easyhome Ltd. is Canada's largest merchandise rental company and the
fourth largest in North America, offering top quality, brand-name
household furnishings, appliances and home electronic products to
consumers under weekly or monthly rental agreements. easyhome Ltd. is
listed on the TSX under the symbol 'EH'.

Certain information included in this news release may constitute
forward-looking statements. Forward-looking statements are based on
current expectations and entail various risks and uncertainties. These
risks and uncertainties could cause or contribute to actual results that
are materially different from those expressed or implied. The Company
disclaims any obligation or intention to update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise.


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    easyhome Ltd.
    Donald K. Johnson
    Chairman of the Board
    (416) 359-4119
    or
    easyhome Ltd.
    David Ingram
    President and Chief Executive Officer
    (905) 272-2788
    or
    easyhome Ltd.
    Bill Johnson
    Executive Vice President & Chief Financial Officer
    (780) 930-3012