Settlement Expected in Helionetics Lawsuit
Helionetics Inc.'s $7 million conflict-of-interest suit against its former chairman Charles Missler is expected to be formally settled out of court by the end of the week, both sides revealed Monday.
At the request of Helionetics, an Irvine defense electronics manufacturer, terms of the settlement will not be disclosed. However Helionetics president Michael Mann said the company would be compensated “in some form” for the damages it claims it suffered during Missler’s tenure as chairman.
The suit filed in August claimed that while Missler was employed as Helionetics’ chief executive, an outside investment company he controlled purchased a small defense electronics maker that Helionetics had once considered buying. The suit charged that the small company, Resdel Industries in Arcadia, would have been valuable to Helionetics.
Furthermore, the suit alleged that Missler, who left Helionetics last December after a lengthy and public power struggle with its largest shareholder, violated his promise to keep his private investments from interfering with Helionetics’ operations.
Although the terms were not disclosed, insiders suggested a likely compensation would be a non-controlling interest in Resdel’s publicly traded stock.
Mann, who said only administrative details remain to be resolved, said an out-of-court settlement was in the best interests of the company. In the last year, Helionetics has been suffering from losses, revolving-door management and a need to sharply focus its business strategies.
Missler, now a private investor in a variety of small companies, said he agreed to the settlement in an effort to put the matter behind him. “I didn’t want to be faced with several years of litigation expense and ambiguity that could injure the company (Resdel) and its officials,” he said. “It’s important now to get on to other things.”