3D Systems will contest the Oct. 16 decision from a private arbitration dispute pertaining to its 2011 purchase of Print3D Corporation, the company announced Monday in a press release.
Under the ruling, 3D Systems will be forced to pay approximately $11.3 million. The charges include $7.3 million for damages, $2.3 million for fees and expenses, and $1.7 million in prejudgment interest.
The legal snafu began Aug. 23, 2013 when a former employee of 3D Systems filed a lawsuit in a U.S. District Court in Hawaii. That same person was also a 50 percent shareholder of Print3D. The plaintiff claimed that the company broke a purchased agreement so that it wouldn’t have to pay “the former employee additional monies pursuant to earn out provisions in the agreement,” according to the release. The case was moved to the U.S. District Court for the Western District of North Carolina, with the arbitration taking place in June 2015. On Oct. 16 the arbitrator ordered the awards to the former employee due to breaches in the contract. The arbitrator also determined that 3D Systems did not commit fraud nor did it make any careless misrepresentations to the plaintiff.
3D Systems said the single arbitrator overstepped his bounds in the ruling and that it hopes to challenge the decision in federal court.
“We were extremely disappointed with the decision of the arbitrator,” said Andrew Johnson, executive V.P. and C.L.O. of 3D Systems. “We firmly believe the arbitrator’s ruling is not supported by the facts of this case or the agreement between the parties.”
Johnson continued, “Notwithstanding our right to appeal, given the arbitrator’s decision, we expect to record an expense provision for this matter in the quarter ending September 30, 2015. The provision is subject to adjustment based on the ultimate outcome of our appeal. However, we do not believe that the award will impact our ability to realize our existing business plans in the short or long term.”
The company said that if its efforts prove to be unsuccessful following the full appellate process in federal court, it plans to pay the $11.3 million “from cash on hand.”
Filed Under: Industrial automation