Thursday 24th March 2016
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American seedling company ArborGen, which is part-owned by NZX-listed forestry biotech company Rubicon, has settled with nine former employees for an undisclosed sum, avoiding having to pay US$53 million in damages and costs.
Rubicon, which owned 32 percent of ArborGen as of June last year, said a South Carolina court had granted the defendants' motion to dismiss its previous judgement. In December, that court awarded the plaintiffs US$43 million in damages and US$10 million in interest and costs. Rubicon and Arborgen co-owners International Paper and MeadWestvaco were partner defendants.
"The parties to the litigation have agreed a confidential settlement arrangement, which brings this matter to a final conclusion," Rubicon said. "The net financial cost to Rubicon of that settlement is immaterial, and as far as Rubicon and its investment in ArborGen are concerned, there is no further financial impact from this lawsuit. As the settlement terms are confidential to all parties, there will be no further comment on the matter."
The Auckland-based company had previously said it would have to roll over its $20 million banking facility for an extra six months past its July 1 expiry to ensure it could meet the likely funding needs for ArborGen this calendar year.
Rubicon reported a profit of US$4 million in the six months ended Dec. 31 from zero earnings a year earlier, on largely flat revenue of US$210 million.
The shares gained 4.6 percent to 23 cents, and have fallen 23 percent this year.
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