TUCSON
Arizona Star August 6, 2009
Tucson firm to pay $5.3M to settle suits
Tucson-based Applied Energetics Inc. said it will pay $5.3 million to settle 2006 class-action lawsuits alleging the company withheld information from shareholders about problems with a product designed to defeat roadside bombs.
Besides payment of $5.3 million in cash, the company said it will issue new stock worth $1.2 million, up to 4 million shares.
Applied Energetics, formerly known as Ionatron Inc. , admitted no wrongdoing as part of the settlement and said it settled to avoid the uncertainty and expense of further litigation. Insurance will pay for the cash payout, the company said.
The settlement, which is still subject to court approval, also releases from any claims company executives including cofounder and former chairman Robert Howard and former CEO Thomas C. Dearmin.
The consolidated lawsuits were filed after then-Ionatron revealed in May 2006 that its anti-bomb device was not deemed “deployment-ready” by the U.S. military because its vehicle wasn’t rugged enough. The company’s shares fell nearly 40 percent in the next four days.
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