Trex Company, Inc. (NYSE:TREX), the world’s largest manufacturer of high-performance wood-alternative decking and railing, announced that on August 19, 2013, the U.S. District Court for the Northern District of California granted preliminary approval of a Settlement Agreement that will resolve a nationwide class action lawsuit filed in California alleging certain misrepresentations and defects in Trex’s first-generation composite products relating to mold growth and color issues.
Under the terms of the settlement, Trex will provide to qualified claimants a one-time cash payment or the opportunity to receive other relief, including a rebate certificate on its newer-generation shelled products (Trex Transcend® and Trex Enhance®). This relief would be available for any eligible consumer whose first-generation composite product has a certain level of mold growth, color fading or color variation and who meets certain other requirements, as set forth in the Settlement Agreement. The settlement applies to any Trex first-generation composite product purchased between August 1, 2004 and the date on which the Court enters its Order granting preliminary approval of the settlement. The claim resolution process and other terms of the settlement are described in the Settlement Agreement and class notice, which will soon be available on www.trex.com/legal/2013classactionsettlement.aspx. The cost to Trex under the settlement is capped at $8.25 million plus $1.475 million in attorneys’ fees to be paid to the Plaintiffs’ counsel upon final approval of the settlement by the Court.
“Our decision to settle the case is by no means an admission of any of the allegations made by the plaintiffs,” said Ronald Kaplan, chairman, president and CEO of Trex. “Trex has steadfastly denied any liability and we were fully prepared to defend our position. We strongly believe we would have prevailed; however, we settled on terms that we feel benefit both our consumers and Trex. This settlement allows our company to avoid additional expensive, time-consuming litigation and to focus on delivering quality products and service to consumers, while providing certain relief to those customers affected by these issues.”