A federal judge in Massachusetts slapped Biolitec (ETR:BIB) with a $75 million judgment after ruling that the German medical laser maker deliberately effected a so-called "downstream merger" to move its incorporation to Austria to escape jurisdiction in U.S. courts.
The harshly-worded ruling by Judge Michael Ponsor trebles the $23.2 million awarded to AngioDynamics (NSDQ:ANGO) by a New York court in 2012, and adds $3.6 million in interest and another $1.9 million in legal costs, according to court documents.
"We are pleased with the court’s decision," AngioDynamics president & CEO Joseph DeVivo said in prepared remarks. "The judgment was based on the defendant’s refusal to cooperate in their discovery obligations in the Massachusetts court, just as Biolitec originally failed to live up to its obligation to indemnify us, hurting our business as we defended ourselves against infringement claims concerning the distribution of their products. We will continue to vigorously pursue this litigation until we recover our damages, however long it takes."
Ponsor, who earlier in the case issued an arrest warrant for ex-Biolitec CEO Wolfgang Neuberger, decried Biolitec’s conduct during the case.
“Throughout the course of this litigation, nearly half a decade in length, defendants have tried to circumvent the judicial process and evade accountability. When their conduct evolved from evasive, to delinquent, to grossly contumacious, defendants left the court no choice but to enter default judgment in plaintiff’s favor," he wrote, according to the documents. "Defendants willfully allowed [Biolitec] to enter into the [supply & distribution agreement with AngioDynamics] without any intention of complying with its indemnification obligations. Defendants then intentionally interfered with the contract, inducing [Biolitec] to break the agreement. Finally, defendants transferred at least $18 million of [Biolitec’s] assets once its liability became apparent. Their goal, quite clearly, was to prevent plaintiff from being indemnified and, subsequently, from recovering the resulting New York judgment. Given these facts, defendants’ actions were calculated, deceitful, and egregious. Defendants conducted themselves in an effort to escape their obligations and, equally troubling, to prevent the enforcement of a judicial mandate."
AngioDynamics in October 2012 won a $16.5 million award in a separate lawsuit when a judge ruled that Biolitec, which provided laser vein ablation technology to AngioDynamics, failed to defend and indemnify the medical device company in lawsuits filed against it by Biomed and Covidien (NYSE:COV) subsidiary VNUS Medical Technologies. The judge further ruled to deny Biolitec’s request for an interlocutory appeal and ordered his memorandum sealed for 1 year.
Biolitec has appealed Ponsor’s earlier ruling to the U.S. Court of Appeals for the 1st Circuit.
