Utah-based Paradigm Medical Industries Inc. announced that verbal agreements have been made to settle certain lawsuits brought against the company and its former executive officers, Thomas Motter, Mark Miehle and John Hemmer.
The following are the lawsuits that have been verbally settled:
— The class action lawsuit filed on May 14, 2003 by Richard Meyer, individually and on behalf of all others similarly situated, against Paradigm Medical and certain former executive officers in the United States District Court for the District of Utah, which was consolidated into a single action on June 28, 2004 with two other class action lawsuits — the class action lawsuit filed by Michael Marone on June 2, 2003 and the class action lawsuit filed by Lidia Milian on July 21, 2003 against the company and its former executive officers in the same court. The consolidated action is captioned In re Paradigm Medical Industries Securities Litigation, with lead plaintiffs Rock Solid Investments of Miami Inc., Brito & Brito Accounting Inc. and Joseph Savanjo.
— The class action lawsuit filed on Oct. 14, 2003 by Albert Kinzinger, Jr., individually and on behalf of all others similarly situated, in the Third District Court for the State of Utah against Paradigm Medical and certain former executive officers.
— The lawsuit filed on July 10, 2003 by Innovative Optics Inc. against Paradigm Medical and certain former executive officers.
Under the terms of the settlement agreements, U.S. Fire Insurance Company, which issued a Directors and Officers Liability and Company Reimbursement Policy to Paradigm for the period from July 10, 2002 to July 10, 2003, has agreed to pay an undisclosed amount of cash to the classes in the class action lawsuits and to Innovative Optics Inc. in settlement of these lawsuits. Under the terms of settlement, Paradigm Medical is to pay U.S. Fire the sum of $220,000, representing the remaining amount owing under a $250,000 retention obligation in the insurance policy, and to execute a policy release in favor of U.S. Fire as to coverage under the insurance policy.
The parties to the settlement and their respective legal counsel are in the process of preparing written settlement agreements to memorialize the terms of the verbal agreements. Settlement of the lawsuits is subject to certain conditions, which include but are not limited to the following:
— Each of the settlement classes shall, in their respective actions and at their own expense, obtain preliminary approval of the terms of settlement by both the court in the federal action and the court in the state action.
— After obtaining a court order granting preliminary approval of the terms of settlement in the respective actions, each of the classes are required, in their respective actions and at their own expense, to provide notice to all persons that are potential members of the federal settlement class and the state settlement class, respectively.
— The federal settlement class members and the state settlement class members shall have a period of time from the date of the mailing of such notice in which to “opt-out” of the federal settlement class and state settlement class, respectively.
Under the terms of the settlement, U.S. Fire has the option to terminate the settlement agreements if the cumulative dollar value of the claims held by individuals or entities that “opt-out” of the federal settlement class or the state settlement class exceeds $250,000. However, if such “opt-outs” exceed $250,000, the parties in the class have a period of time to cure by reducing the amount of “opt-outs” to less than $250,000.
If U.S. Fire exercises its option to terminate the settlement agreements in the event the “opt-outs” exceed $250,000 and the parties are unable to reduce the amount of “opt-outs” within an allowable time period, the terms and conditions of the settlement agreements will have no further force and effect, and all parties will be restored to their respective positions in the various legal actions prior to such settlement.
“We are extremely pleased to have reached verbal agreements on these lawsuits. This settlement represents a major milestone for the new Paradigm Medical and will better enable the company to focus its energy and resources to further reduce costs, introduce new products, drive growth and enhance shareholder value,” said Paradigm Medical’s Chief Executive Officer, John Yoon.
Paradigm Medical Industries Inc. currently develops, manufactures and markets surgical and diagnostic high-tech, proprietary equipment and consumable products for the medical industry.
Was this article valuable?
Here are more articles you may enjoy.