Covenant Transportation Gets Unfavorable Court Ruling In Cargo Claim Case

(RTTNews) - Covenant Transportation Group, Inc. (CVTI) Tuesday said the U.S. District Court for the Southern District of Ohio passed an unfavorable pre-trial decision in the 2008 cargo claim case against the company's unit Southern Refrigerated Transport, Inc. The court awarded the plaintiff nearly $5.9 million plus prejudgment interest and costs and denied a motion for summary judgment by SRT. The company said the judgment will hurt its earnings.

Commenting on the court ruling David Parker, CEO of Covenant said: "... At this stage, we are reviewing our options and expect to appeal the decision. If an appeal is unsuccessful, the uninsured portion of the award in excess of our current reserve is estimated at approximately $7.0 million to $8.0 million before tax, or a range of approximately $0.29 to $0.33 after tax per diluted share. We expect to increase the reserve for this claim by an amount in the stated range during the third quarter. The actual amount of any payment will be subject to various interest rate, time period, legal cost, and other factors, as well as the success of any appeal."