Apr 07, 2005. /Lesprom Network/. Weyerhaeuser Company (NYSE:WY) said that it will appeal to the U.S. District Court for the Northern District of Georgia, Atlanta Division, a decision by a U.S. Bankruptcy Judge awarding $460 million to the Litigation Claims Representative of Paragon Trade Brands Inc. Weyerhaeuser has not recorded a charge against earnings because it believes the bankruptcy decision will ultimately be reversed. Generally accepted accounting principles do not permit a reserve to be established if there is a high likelihood that the company will not be required to pay damages. However, the company also said that it cannot predict with certainty the ultimate outcome of the lawsuit and, therefore, there could be a charge that could materially and adversely affect the company's results of operations or financial condition for the quarter and the year in which the charge is recorded. Factors that could lead to a charge include whether the appeal to the U.S. District Court and/or Court of Appeals for the Eleventh Circuit is resolved in the company's favor; the outcome of any retrial ordered by an appellate court; and whether a summary judgment in favor of the company on liability is ordered by an appellate court. The bankruptcy court's decision arises out of Weyerhaeuser's sale to Paragon of its infant diaper business in February 1993. In May 1999, the bankruptcy estate of Paragon commenced a lawsuit against Weyerhaeuser alleging that it had breached warranties in the sale agreements by failing to have licenses at the time of the sale to certain patents. In June 2002, the bankruptcy court issued an oral opinion granting partial summary judgment on liability in favor of the Paragon estate. The court issued its damage award on April 5, 2005. Weyerhaeuser has consistently maintained that the sales agreement transferred all liabilities of the infant diaper business, including any potential liabilities relating to the patents involved in the litigation, to Paragon as part of the sale and that, accordingly, the suit is without merit. The company has said that it plans to take every step available to seek to have the bankruptcy court's decision reversed.