CODI settles Lugano bankruptcy claims; expects recovery from inventory, tax refunds, insurance and litigation proceeds

Compass Diversified Holdings

• CODI to receive 34.79% of net proceeds from Lugano inventory sale, tax refunds, and theft insurance; 45% from certain third-party litigation; 25% from other litigation.
• Settlement contingent on creditor approval and bankruptcy court confirmation of Lugano Plan of Liquidation; no assurance of effectiveness or timing.
• CODI and related parties receive releases from all claims by Lugano estate; CODI retains residual claim but expects no material recovery from it.
• Chairman says settlement accelerates resolution, reduces costs and uncertainty; CODI can focus on deleveraging and closing valuation gap.
• CODI also reviewing management services agreement, expects to complete in coming weeks.