Lighting Science Group Corporation (OTCMKTS:LSCG) Files An 8-K Other EventsItem 8.01
Appellate Victory in Geveran Lawsuit
On June 9, 2017, the Florida Fifth District Court of Appeals (the “Appeals Court”) reversed the trial court’s grant of summary judgment against Lighting Science Group Corporation (the “Company”) and the other defendants in the case, including J.P. Morgan Securities, LLC (“JP Morgan”) in the lawsuit brought by Geveran Investments Limited (“Geveran”), a Cyprus-based investment entity associated with Norwegian billionaire John Fredriksen.
Geveran, one of the Company’s stockholders, filed suit on June 22, 2012 under Florida securities laws seeking rescission of its $25.0 million investment in the Company and recovery of attorneys’ fees and court costs for alleged violations of the Florida securities laws. Geveran alternatively sought unspecified money damages, as well as recovery of court costs, for alleged common law negligent misrepresentation. On August 28, 2014, the Circuit Court for Orange County (the “Circuit Court”) granted Geveran’s motion for partial summary judgment with respect to its first cause of action for violation of the Florida Securities and Investor Protection Act. On November 30, 2015, the Circuit Court entered judgment against the defendants, including the Company, on a joint and several basis, in the amount of approximately $40.2 million. On December 4, 2015, the Company, along with the other defendants, filed a Notice to Appeal to the Appeals Court and each of the Company and JP Morgan posted a bond in the amount of $20.1 million to secure the circuit court’s judgment.
The Appeals Court’s decision validates the Company’s long-held belief that the Circuit Court erred in granting summary judgment against the Company and the other defendants. In reversing the summary judgment decision, the Appeals Court held that Geveran must prove that it relied on alleged misrepresentations by Company representatives in connection with Geveran’s investment. The Appeals Court further held that there are genuine issues of material fact as to both the materiality of the alleged misrepresentations as well as Geveran’s lack of reliance.
The Company and JP Morgan can move to discharge the bond once the Appeals Court issues its mandate implementing its decision, which is expected to occur within 30 days after the Appeals Court issued its opinion, subject to Geveran’s right to seek post-opinion relief (for panel rehearing and/or rehearing en banc by the entire court, for clarification, or to certify a question to the Florida Supreme Court).
The case will now be remanded to the Circuit Court for further proceedings, subject to Geveran’s right to seek post-opinion relief. The Company believes Geveran’s suit is without merit and intends to continue to vigorously defend the matter.
About Lighting Science Group Corporation (OTCMKTS:LSCG)
Lighting Science Group Corporation is a provider of light emitting diode (LED) lighting technology. The Company designs, develops, manufactures and markets illumination solutions that use LEDs as exclusive light source. The Company’s product portfolio includes offerings, such as replacement lamps, luminaires and biological lighting. LED-based retrofit lamps (replacement bulbs) are used in existing light fixtures, as well as LED-based luminaires (light fixtures). The Company’s lamps and luminaires are used for indoor and outdoor residential, commercial, industrial and public infrastructure lighting applications. It has developed LED lighting technology whose color is tuned to achieve specific biological effects. The Company offers LED luminaires for street lighting and lighting in parking garages, outdoor areas, warehouses and manufacturing areas. The Company offers a line of retrofit lamps, integrated retrofit kits and luminaires for commercial and residential lighting applications.