easyhome Ltd.

easyhome Ltd.

June 15, 2005 17:47 ET

easyhome Ltd. Announces Court Approval of the Class Action Lawsuit Settlement Agreed to in Principle on March 4, 2005

EDMONTON, ALBERTA--(CCNMatthews - June 15, 2005) - easyhome Ltd. (TSX:EH), Canada's leading merchandise rental company, today announced that the Ontario Superior Court of Justice has certified a class action lawsuit commenced in April, 2004 as a class proceeding under the Class Proceedings Act, and granted approval of the settlement that had been agreed to between easyhome and the representative plaintiff on behalf of the Class. The representative plaintiff had alleged that revenue earned by easyhome on rental agreements that ended with the acquisition of products by the customer had included interest in excess of the maximum allowable effective annual rate of interest prescribed in the Criminal Code of Canada. easyhome denied the allegation, and the settlement does not constitute any admission of liability by the Company.

Under the terms of the settlement, easyhome is to pay to Class members a credit voucher in the amount of $55 for every rental agreement under which the Class member acquired easyhome merchandise during the class period. The total value of the credit vouchers that may be claimed, on the basis of known eligible rental agreements, is $7,813,135. The credit vouchers issued to Class members are transferable, and may be used to purchase easyhome merchandise, be applied to existing easyhome rental agreements or used after starting a new agreement. Unused credit vouchers will expire on December 31, 2005. In addition, easyhome is to pay the legal fees and costs of the Class in the proceeding, and the costs associated with administering the settlement process. Based on the Company's estimate of the rate of take-up and redemption of the credit vouchers, the Company has recorded a pre-tax reserve in its second quarter of $3,600,000 to cover the costs of the settlement, including legal fees.

David Ingram, President and CEO of easyhome, stated that " We are pleased to have this action put behind us so that we may concentrate on the future growth prospects of the Company. The lawsuit required a great deal of senior management's time and because the Company believes the settlement is fair and reasonable to all parties, it made sense at this time to resolve the matter on this basis, even though we remain convinced we are in the merchandise rental business and that our rental agreements do not include interest charges. However, to provide further transparency in our business practices, and avoid the risk of future litigation, we have committed to revise our rental agreements such that they cannot be construed as giving rise to an interest charge in excess of the rate prescribed in the Criminal Code of Canada."

The lawyers for the Class are Harvey T. Strosberg Q.C., Pat Speight and Jay Strosberg of the Windsor law firm Sutts, Strosberg LLP, which specializes in class actions. easyhome was represented by Ronald G. Slaght Q.C. and Craig Martin of the Toronto law firm Lenczner Slaght Royce Smith Griffin LLP.

Mr. Strosberg said that "easyhome has acted fairly and responsibly in settling this class action. The settlement is in the best interests of easyhome's customers."

easyhome Ltd., with 153 locations, 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.

Contact Information

  • easyhome Ltd.
    David Ingram
    President and Chief Executive Officer
    (905) 272-2788
    easyhome Ltd.
    Bill Johnson
    Executive Vice President and Chief Financial Officer
    (780) 930-3012
    (780) 481-7426 (FAX)
    Harvey T. Strosberg, Q.C.
    Solicitor of record for the plaintiff
    (519) 561-6285