Spectrum and Sculley Agree to Bury the Hatchet : Dispute: The wireless communications firm and its former CEO agree to put aside lawsuits against each other.
John Sculley and Spectrum Information Technologies have agreed to drop the lawsuits they filed against one another after Sculley quit the company last month--thus halting, at least temporarily, one of the most colorful public spats in the business world.
Neither Spectrum nor Sculley would comment Thursday on the terms reached, but Heiko Thieme, president of the mutual fund that is Spectrum’s largest shareholder, confirmed that the two parties had agreed to drop the suits without any money changing hands. Thieme described the agreement as a “first step” toward a settlement.
Sculley, the former chairman of Apple Computer Inc., became Spectrum’s chief executive in October. He vowed to build the small, troubled wireless communications company into a powerhouse, but less than five months later he resigned and filed a $10-million fraud suit against Peter Caserta, Spectrum’s president and former chairman, who had recruited him.
Sculley claimed he had not been informed about problems at the company, among them a stock manipulation investigation being conducted by the Securities and Exchange Commission. Spectrum quickly responded with a $300-million lawsuit of its own, accusing Sculley of an elaborate plot to exploit Spectrum’s business opportunities for his own benefit.
Spectrum’s stock price had fluctuated wildly even before Sculley joined, with Caserta and some promoters of Spectrum shares at times making what appeared to be extravagant claims about the value of wireless communications patents the company owns.
The stock leaped to more than $11 a share after Sculley’s arrival and plunged to less than $3 on his departure.
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Spectrum shares jumped 50 cents to close at $3.44 on Thursday in heavy Nasdaq trading.
Sculley, Caserta and the company still face problems. Sculley’s reputation as a shrewd executive has been marred; Caserta reportedly is facing a grand jury investigation into the marketing of investment services by another company he runs.
Spectrum still must persuade key players in the wireless data industry to use its technology even as it deals with the management turmoil, financial woes and a number of lawsuits pressed by disgruntled shareholders.
In a joint statement Thursday, Spectrum and Sculley said they had agreed to withdraw their lawsuits “without prejudice,” meaning the suits could be refiled later.
“Speculation created by the repetition of charges and counter-charges is not serving any useful purpose,” their statement said.
“By withdrawing these suits, Spectrum’s management can concentrate on developing its technology . . . and the individuals involved can get on with their careers,” the statement said.
Thieme, who is president of the American Heritage Fund, said he played the unusual role of mediator in brokering the settlement. He applauded the agreement as good for shareholders, and said it could lead to a further accommodation of some kind between Sculley and the company, such as a consulting arrangement.
