ATLANTA - Aaron's, Inc. (NYSE: AAN) said it entered into a $6 million settlement of a lawsuit with a former employee who claimed she was sexually harassed by a former co-worker in 2006.

Aarons, which retails nationally and manufactures furniture and bedding at 14 plants in eight states, originally lost the case and was ordered to pay $95 milllion by the U.S. District Court for the Southern District of Illinois.

The court later reduced the judgment against Aaron's to $39.8 million. Then last fall in a separate trial the former co-worker was acquitted of harassment and all other charges on September 28, 2011.

After a January follow-up hearing, at which the court called the original judgment "monstrously excessive," according to Aaron's, an agreement was reached to settle the lawsuit.

The trial had a significant impact on earnings for Aaron's, which recorded a charge of $36.5 million in the second quarter of 2011 as an accrual for the judgment and associated legal fees and expenses of $41.5 million. Insurance covered $5 million of it.

The settlement  of $6 million means Aaron's gains income of $35.5 million in the first quarter of 2012.

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