Compass Diversified Settles Lugano Bankruptcy Claims

Key Highlights

• Compass Diversified (CODI) entered into a Settlement Agreement and Plan Support Agreement with Lugano Diamonds & Jewelry Inc. and its creditors.
• The agreements resolve all claims against CODI and its related parties stemming from Lugano's bankruptcy proceedings.
• CODI will support Lugano's proposed plan of liquidation, which incorporates the settlement terms.
• CODI is entitled to 34.79% of net proceeds from Lugano's inventory disposition, tax refunds, and precious-stone theft insurance policy.
• CODI will receive 45% of net proceeds from liquidation trust claims against a specific third party.
• CODI will receive 25% of net proceeds from certain other litigation claims pursued by the liquidation trust.
• CODI and its related parties will be released from all claims by Lugano or its bankruptcy estate.
• The settlement is contingent on Lugano creditor approval and bankruptcy court confirmation of the Plan of Liquidation.