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April 1, 2010

US: Oshkosh wins fraud dismissal suit

Truck maker Oshkosh has won dismissal of an investor class-action lawsuit alleging the maker of heavy trucks inflated its stock price by failing to write down a troubled Dutch acquisition fast enough.

Truck maker Oshkosh has won dismissal of an investor class-action lawsuit alleging the maker of heavy trucks inflated its stock price by failing to write down a troubled Dutch acquisition fast enough.

US District Judge William Griesbach in Milwaukee said it was not credible to believe the company and its auditor, Deloitte & Touche, intended to defraud anyone about Geesink Norba Group, a garbage truck maker that Oshkosh bought in 2001 for USD137.6m, including USD95.6m of goodwill.

According to plaintiffs led by the Massachusetts Public Pension Funds, it should have been obvious by 2003 that the acquisition was a failure and Oshkosh should have taken a writedown sooner.

But in his 44-page ruling on Tuesday, Griesbach said “it is simply not plausible to infer that any of the defendants intended to defraud anyone, given the true and extensive financial data they did disclose and the consistent red flags they issued about a potential impairment to goodwill.”

Griesbach dismissed the case against the Oshkosh, Wisconsin-based company with prejudice, meaning it cannot be brought again.

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