QT Vascular and a pair of related companies last week won a stay in their $20 million loss to AngioScore so their appeal can proceed.
In July, a federal judge ruled that founder Eitan Konstantino violated his duties to AngioScore when he started QT Vascular, TriReme Medical and Quattro Vascular. AngioScore, which Spectranetics (NSDQ:SPNC) acquired last year for $230 million, accused Konstantino of breaching his fiduciary duties to AngioScore by developing the TriReme’s Chocolate balloon catheter, which competed directly with AngioScore’s AngioSculpt balloon. The Chocolate device won 510(k) clearance from the FDA in June 2014. The lawsuit, filed in June 2012 in the U.S. District Court for Northern California, also accused TriReme, Quattro and QT Vascular (SGX:5I0) of abetting in Konstantino’s alleged breaches.
Judge Yvonne Gonzalez Rogers agreed July 1, ordering Konstantino to disgorge $250,000 received for licensing the Chocolate rights and a 2.85% royalty on sales of the device. Gonzalez Rogers also ordered Konstantino to cough up his roughly 15 million shares in QT Vascular, which were worth about $2 million at their July 2 closing price of ¢13.5 (0.182 SGD), and any profits gleaned from sales of the stock and any remuneration from consulting on the Chocolate device. The judge also awarded nearly $3.0 million in lost profits and another $17.1 million in future lost profits to AngioScore on future sales from 2014 through the 2nd quarter of 2019.
TriReme, QT Vascular and Quattro Vascular appealed to the U.S. Court of Appeals for the Federal Circuit, asking the appeals court to stay the verdict pending its appeal based on their claim that they will likely go bankrupt if forced to pony up.
The Federal Circuit granted the stay Nov. 25, ordering the defendants not to transfer assets out of the U.S. except in the normal course of business. QT Vascular must also post a bond with the court in the event of a major asset sale or change of control, according to court documents.
