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GKN shares rally on legal victory

SHARES OF engineering giant GKN rose 22p to close at 757p yesterday as the company celebrated the end of a five-year legal battle in the US, in which action was taken against it by 2,500 franchisees of its exhausts business subsidiary, Meineke Discount Mufflers.

The Court of Appeals in Virginia ruled that GKN was not liable and reversed an earlier decision. The case started in 1993 when the franchisees accused GKN of misusing funds intended for promotion. In 1996 GKN was convicted and ordered to pay damages of nearly $750m. It made provision in its 1996 accounts of pounds 265m.