KFI has published this statement on Ravelry (copied wholesale):
The allegations and claims in The Knit With’s recently filed complaint are without merit. We intend to defend the lawsuit vigorously in the proper legal arena. Our attorneys are currently in the process of preparing the appropriate legal response.
~ KFI ~
And looking at a previous post by the same user (KFI, usually(?) Jeff Denecke posting), two months ago:
KFI is a very different company from what it was even 3 years ago. Internal management has changed, customer service staff is all new and improved, warehouse staff is improved – in reality there are only a handful of people left in the company that were here during the height of complaints about KFI. We have improved ourselves, and hope folks will give us a chance to show it.