Summary
Dollar Tree, Inc. (DLTR) reported on January 4, 2018, a settlement of a lawsuit related to its November 2015 divestiture of 330 Family Dollar stores to Dollar Express LLC, a Sycamore Partners entity. Under the terms of the settlement, Sycamore Partners and Dollar Express will pay Dollar Tree $35.0 million. This settlement brings finality to litigation concerning the divestiture, with all parties agreeing to mutual releases and dismissal of claims.
Key Highlights
- 1Settlement reached in lawsuit stemming from the 2015 divestiture of 330 Family Dollar stores.
- 2Sycamore Partners and Dollar Express LLC to pay Dollar Tree $35.0 million as part of the settlement.
- 3The settlement includes mutual releases and dismissal of litigation claims and counterclaims with prejudice.
- 4The $35.0 million received will result in a partial reversal of previously recorded receivables impairment charges.
- 5The reversal of impairment is expected to impact the fiscal fourth quarter 2017 Condensed Consolidated Income Statement.
- 6The company had previously written off $53.5 million in receivables from Dollar Express as uncollectible.
Frequently Asked Questions
The settlement provides a resolution to a previously reported lawsuit related to the divestiture of 330 Family Dollar stores. It also brings in $35.0 million in cash and allows for a partial reversal of previously recorded impairment charges, positively impacting the fiscal fourth quarter 2017 financial results.
Dollar Tree received $35.0 million from Sycamore Partners and Dollar Express LLC as part of the settlement agreement.
The company had previously determined that $53.5 million in outstanding receivables from Dollar Express were not recoverable and recorded impairment charges to write down these receivables to zero.
Yes, the settlement is expected to result in a partial reversal of the receivables impairment charge, specifically $35.0 million, which will be recognized in the Company's fiscal fourth quarter 2017 Condensed Consolidated Income Statement.