Lightech files lawsuit against Carmanah over failed merger

Lightech has apparently filed a Statement of Claim in Israel regarding the failed deal that would have seen the company merge with Carmanah.

Carmanah Technologies Corporation (TSX: CMH), a developer of solar LED lighting and power systems for a range of industrial applications, says that a lawsuit has been filed against the company by Lightech Electronic Industries Ltd., an Israel-based LED driver company.

Carmanah’s press release says that the lawsuit alleges a breach of the terminated Merger Agreement between Lightech and Carmanah, among other things, and that Lightech is claiming damages of USD $6 million.

Carmanah and Lightech announced a merger agreement in October 2010, for an amount that could have reached US$20 million. However, Carmanah terminated the deal in November 2010.

“It is disappointing that Lightech has chosen to respond in this way to the proper termination of the Merger Agreement,” stated Ted Lattimore, Carmanah’s CEO. “Carmanah has always acted in good faith and was within its rights to terminate the Merger Agreement.

“As previously announced, we are seeking return of the Signing Payment that was advanced to Lightech under the Merger Agreement and have filed a claim against Lightech in British Columbia Supreme Court.”

Carmanah said in its press release that it “has learned that Lightech Electronics Ltd. and certain of its shareholders have filed a Statement of Claim in the District Court for Tel-Aviv Yaffo, Israel against Carmanah Technologies Corporation, Carmanah’s single-purpose Israeli subsidiary, and certain of Carmanah’s officers claiming damages of USD $6 million. The Statement of Claim, which has not been served on Carmanah or any of the named Defendants, alleges a breach of the terminated Merger Agreement between Lightech and Carmanah, among other things.”

Carmanah also said that it will review Lightech’s claim when it is served and, after consulting with legal counsel, Carmanah intends to vigorously defend the claim which Carmanah believes to be entirely without merit.

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