Duluth-based GeaCom and former minority shareholders have resolved a legal dispute that was being adjudicated in Federal Court for the northern district of Illinois.
The shareholder lawsuit involved plaintiffs who had invested about $3.5 million in GeaCom, which produces a product called the Phrazer. It bridges communication gaps between emergency medical personnel and people whose primary language is not English. The plaintiffs contended GeaCom had breached investor agreements and perpetrated fraud under securities laws.
“As originally stated, there was no merit to any of the claims,” GeaCom said in a Wednesday news release. But Burton Brown, attorney for the plaintiffs, said the settlement resulted from a favorable monetary offer from GeaCom to his clients. A confidentiality agreement prevents the parties from revealing terms of the settlement.
In a follow-up prepared statement, GeaCom said “Within hours of the motion for summary judgment, which evaluated the facts of the case, the plaintiffs and their counsel offered a settlement to GeaCom instead of allowing the case to proceed and face a court ruling. Although the company was confident and anticipated a successful ruling, the settlement terms offered by the plaintiffs were quite favorable to GeaCom.”
Another civil case involving GeaCom begins on Monday. The plaintiff in that lawsuit formerly supplied a minor sub-assembly component to the Duluth firm. GeaCom said it anticipates a favorable outcome.
“When this inappropriate disruption is conclusively resolved, GeaCom looks forward to focusing on its excellent market performance,” the company said.