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disclosed on the Schedules or Exhibits to this
Agreement;
Closing was to occur after petitioner completed a due
diligence review and other specified events. The purchase
agreement disclosed that DeVilbiss had created a $400,000 reserve
for pending patent liability claims and legal fees expected to be
incurred in litigating the Lemelson lawsuit. After the price was
set for the acquisition and during the due diligence period,
DeVilbiss made disclosure to petitioner of pending lawsuits,
including the Lemelson lawsuit. DeVilbiss provided to petitioner
a schedule containing the following entry:
CDCA STATE DATECLAIM AMT
Lemelson, Jerome v. Champion DE 06/19/85 Open
ACTION Patent infringement claim - Robot Apparatus
COMMENTS Latest settlement demand is $500,000. Further
discovery and trial pending.
During the due diligence period, Becker expressed his opinion to
representatives of petitioner that he did not believe that the
Lemelson lawsuit was worth anything. Although Champion remained
the named defendant in the Lemelson lawsuit, petitioner became
the party in interest after petitioner acquired the assets of
DeVilbiss.
During the due diligence period, representatives of
petitioner, including Gary F. Anton (Anton), petitioner’s
director of audits; Thomas Buckman (Buckman), petitioner’s vice
president of patents and technology; and John Patrick O’Brien
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Last modified: May 25, 2011