UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
July 26, 1999
Date of Report (Date of earliest event reported)
SALANT CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 0-2433 13-3402444
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1114 Avenue of the Americas, New York, New York 10036
(Address of Principal Executive Offices) (Zip Code)
(212) 221-7500
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
As previously reported, the Company is a defendant in a lawsuit
captioned Maria Delores Rodriguez-Olvera, et al. vs. Salant Corp. et al.,
Case No. 97-07-14605-CV, in the 365th Judicial District Court of Maverick
County, Texas (the "Rodriguez-Olvera Action"). The plaintiffs in the
Rodriguez-Olvera Action assert personal injury, wrongful death, and
survival claims arising out of a bus accident that occurred on June 23,
1997. A bus registered in Mexico, owned by the Company's subsidiary
Maquiladora Sur, S.A. de C.V. ("Maquiladora"), a Mexican corporation (and
driven by a Mexican citizen and resident employed by Maquiladora), carrying
Mexican workers from their homes in Mexico to their jobs at Maquiladora,
overturned and caught fire in Mexico. Fourteen persons were killed in the
accident, and twelve others claim injuries as a result of the accident; the
Rodriguez-Olvera plaintiffs seek compensation from the Company for those
deaths and injuries.
The Company has vigorously defended against the allegations in the
lawsuit. Its defenses include, among other things, that the claims, if any,
asserted by the Rodriguez-Olvera plaintiffs exist against Maquiladora, and
not the Company, and that the Rodriguez-Olvera Action should be tried in
the courts of Mexico, and not the United States, under the doctrine of
forum non conveniens. The Company also contends that the law of Mexico,
rather than that of the United States, governs the Rodriguez-Olvera
plaintiffs' claims. The Rodriguez-Olvera plaintiffs generally disagree with
the foregoing positions, although they have recently advised that they may
now agree that the law of Mexico applies, in whole or in part, while also
contending that under the law of Mexico, they may nevertheless recover
substantial sums.
A motion on behalf of the Company to dismiss the Rodriguez-Olvera
Action under the doctrine of forum non conveniens was denied by the trial
court. The Company then sought review of that ruling by an action for a
writ of mandamus, captioned In re Salant Corporation et al., Case No.
4-98-00929-CV (the "Mandamus Action"), in the Court of Appeals for the
Fourth District of Texas, at San Antonio (the "Texas Court of Appeals"),
which stayed proceedings in the underlying Rodriguez-Olvera Action pending
the outcome of the mandamus proceeding before it.
In developments since the filing by the Company of its last Annual
Report under Form 10-K, the Texas Court of Appeals denied the writ of
mandamus (leaving intact the lower court's denial of the Company's motion
to dismiss for forum non conveniens), and lifted its stay of the underlying
Rodriguez-Olvera Action in the trial court. Mandamus was thereafter sought
in the Texas Supreme Court, and the Texas Supreme Court denied relief.
Upon the lifting of the stay by the Texas Court of Appeals, the trial
court set the Rodriguez-Olvera Action for trial, with jury selection to
begin on July 26, 1999. The Rodriguez-Olvera plaintiffs have advised that
they will rely in substantial part on actions in the United States that are
alleged to give rise to liability.
Also, as previously reported, the Company is also a defendant in a
related declaratory judgment action, captioned Hartford Fire Insurance Co.
v. Salant Corp., Index No. 60233/98, in the Supreme Court of the State of
New York, County of New York (the "Hartford Action"), relating to the
Company's insurance coverage for the claims that are the subject of the
Rodriguez-Olvera Action. In the Hartford Action, the Company's insurers
seek a declaratory judgment that the claims asserted in the
Rodriguez-Olvera Action are not covered under the policies that the
insurers had issued. The Company's insurers have nevertheless provided a
defense to the Company in the Rodriguez-Olvera Action, without prejudice to
their positions in the Hartford Action.
If, as the Company contends in the Hartford Action, the
Rodriguez-Olvera claims are covered by insurance, the damages sought by the
Rodriguez-Olvera plaintiffs nevertheless exceed the face amount of the
Company's liability insurance coverage. Accordingly, it is possible that
the damages that would be awarded in the Rodriguez-Olvera Action could
exceed available coverage limits. Since the time of the Company's filing of
its Annual Report on Form 10-K, counsel for the plaintiffs in the
Rodriguez-Olvera Action has once more offered to settle that lawsuit for an
amount that is within the Company's insured limits. While the Company's
carriers made a settlement proposal in response, their offer was for a
lesser amount, and was rejected. The Company has demanded of its carriers
that the Rodriguez-Olvera Action be settled within the Company's policy
limits, and, if it is not, is considering the Company's options in this
regard.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
SALANT CORPORATION
Dated: July 26, 1999 By:/s/ Awadhesh Sinha
------------------------
Awadhesh Sinha,
Chief Financial Officer
