Nathan's expecting nearly $3M charge

Jericho-based Nathan's Famous Inc. may be in hot water.

The hot dog maker on Monday reported that it got an unfavorable Illinois court decision in a dispute with a licensee that may cost it a minimum of nearly $3 million.

The licensee, SMG Inc., filed suit in Cook County, Ill., Circuit Court, disputing Nathan's decision to end the license agreement.

Trial proceedings have ended in that dispute but no overall decision on the key question, whether Nathan's can end the license agreement, has yet been handed down.

However, the court did rule on a summary judgment motion by SMG that may require Nathan's to pay damages totaling somewhere between $2.9 million and $6 million.

"Accordingly, Nathan's expects to record a charge to earnings before taxes of $2.9 million in its second fiscal quarter ended September 26," Nathan's said.

A hearing to set the exact amount of damages will be held Nov. 22.

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