Friday, June 24, 2011

Jeff Fetig pays a mere $603 million while Benton Harbor homeless wander the streets

Whirlpool Agrees To Pay $603 Million To Settle Brazil Bank Dispute


A Whirlpool Corp. (WHR) subsidiary agreed to pay about $603 million to settle all claims related to a long-standing dispute in Brazil with Banco Safra SA, leading the household appliance manufacturer to trim its full-year earnings outlook.

Whirlpool, whose brands include Maytag, KitchenAid and Amana, now expects to report earnings of $8.30 to $9.30 a share, including the costs related to the settlement. The guidance without the charge had previously ranged between $12 and $13.

The company said the settlement related to the enforceability of an unauthorized loan entered into in 1989 by an employee of Embraco, which subsequently became part of Whirlpool's Brazilian business, and who was terminated that year.

The agreement, subject to the approval of a Brazilian court, would result in Whirlpool paying the Brazilian bank about $295 million in the third quarter and $308 million in the first quarter of next year.

Whirlpool said it would record an additional charge of about $439 million in the second quarter to reflect the full amount of the agreement. It expects to fund the settlement with available cash.

"After fully considering all 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," said Chairman and Chief Executive Jeff M. Fettig.

Whirlpool's shares were down 0.1% to $77.13 after hours.

-By John Kell, Dow Jones Newswires