Home appliance maker Whirlpool Corp. settled a 20-year-old lawsuit against its Brazilian subsidiary Wednesday by agreeing to pay nearly $603 to Banco Safra S.A.
In 1989, an unauthorized loan was taken out by a former employee of Embraco, a company that was acquired by the subsidiary. A Brazilian trial court ordered Whirlpool to repay that loan in 2000. The final payment amount continued to be disputed despite the judgment.
Whirpool will pay Banco Safra in two payments—the first installment of about $295 million will be paid in the third quarter, while the remaining $308 million) is expected to be paid in the first quarter of 2012. Whirlpool intends to fund the settlement from available cash.
"Given the recent opportunity to settle the case, and after fully considering all of the circumstances, the uncertainty and potential outcomes, it was a prudent decision and in the best interest of the Company and its stockholders to settle this case now," Whirlpool's CEO Jeff Fettig said in a statement.