UPDATE 1-Gildan settles suit for $22.5 million

Tue Aug 3, 2010 11:05am EDT

* Suit stems from 2008 complaint relating to 2008 guidance

* Senior officers deny wrongdoing (In U.S. dollars unless noted)

TORONTO Aug 3 (Reuters) - Gildan Activewear (GIL.TO) said on Tuesday it had settled a securities class action lawsuit filed in 2008 relating to the clothing maker's earnings guidance in April that year.

Montreal-based Gildan said the settlement, which totaled $22.5 million, would have no impact on the company's earnings or cash flow and that it would be entirely covered by insurance.

Under the terms of the settlement, Gildan and its senior executives deny any wrongdoing.

The original suit complained that Gildan and some of its executives, among other issues, failed to disclose that its Dominican Republic textile facility was underperforming and that it had overstated its financial results.

The settlement, filed before the Ontario Superior Court of Justice, the Quebec Superior Court and the U.S. District for the Southern District of New York, was conditional upon the court approvals.

Shares of Gildan, which makes T-shirts, underwear and socks, were up 57 Canadian cents, or 1.8 percent, at C$32.20 on the Toronto Stock Exchange on Tuesday morning.

($1=$1.02 Canadian) (Reporting by Solarina Ho; editing by Rob Wilson)

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