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Legal Proceedings
12 Months Ended
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
Legal Proceedings

NOTE 16: LEGAL PROCEEDINGS

 

UTHE Technology Corporation v. Aetrium Incorporated

 

Since December 1993, an action brought by UTHE Technology Corporation (“UTHE”) against ATRM and its then sales manager for Southeast Asia (“Sales Manager”), asserting federal securities claims, a RICO claim, and certain state law claims, had been stayed in the United States District Court for the Northern District of California. UTHE’s claims were based on its allegations that four former employees of a Singapore company, which UTHE formerly owned, conspired to and did divert business from the subsidiary, and in turn UTHE, and directed that business to themselves and a secret company they had formed, which forced UTHE to sell its subsidiary shares to the former employee defendants at a distressed price. The complaint alleged that ATRM and the Sales Manager participated in the conspiracy carried out by the former employee defendants. In December 1993, the case was dismissed as to the former employee defendants because of a contract requiring UTHE and them to arbitrate their claims in Singapore. The District Court stayed the case against ATRM and the Sales Manager pending the resolution of arbitration in Singapore involving UTHE and three of the former employee defendants, but not involving ATRM or the Sales Manager. ATRM received notice in March 2012 that awards were made in the Singapore arbitration against one or more of the former employee defendants who were parties to the arbitration. In June 2012, UTHE filed a motion to reopen the case against ATRM and the Sales Manager and to lift the stay, which the court granted. On September 13, 2013, the court entered final judgment dismissing all remaining claims UTHE asserted against ATRM in the litigation. On September 23, 2013, UTHE appealed the district court judgment to the United States Court of Appeal for the Ninth Circuit. The appeal was argued in a court hearing on November 19, 2015. On December 11, 2015, the Court of Appeal issued an order reversing the district court’s grant of summary judgment and remanded the case back to the district court for further proceedings. On January 8, 2016, ATRM filed a renewed motion for summary judgment with the district court. A renewed hearing is scheduled for March 31, 2016.

 

Avila Plumbing & Heating Contractor, Inc. v. Modular Fun I, Inc. f/k/a KBS Building Systems, Inc. & KBS Builders, Inc. (Maine Superior Court, Oxford County, CV-15-39)

 

Avila Plumbing and Heating Contractor, Inc. (“Contractor”) alleges that Modular Fun I, Inc., f/k/a KBS Building Systems Inc. & KBS Builders, Inc. (the “KBS Parties”) failed to pay Contractor $476,477.46 that Contractor claims it is entitled to pursuant to contracts between it and the KBS Parties. Contractor claims it entered into agreements with the KBS Parties in relation to two separate projects to supply materials and furnish services relating to the design and installation of plumbing and HVAC systems. Contractor claims it did the work and furnished the materials contracted for and that the KBS Parties have not paid it pursuant to the contract. KBS has countersued for breach of contract and negligence, claiming that Contractor failed to properly complete the plumbing and HVAC services it was retained to perform on one of the projects. The general contractor on that project is refusing to pay KBS $518,842 that KBS is presently owed citing significant deficiencies in work performed and materials installed by Contractor as its reason for withholding payment from KBS. KBS has a lien in the amount of $518,842 on the property where such project is located and has brought a separate suit against the general contractor and others in Middlesex Superior Court in Massachusetts to enforce its lien and collect the amount owed to KBS on the project. The court has issued a standard scheduling order in this case. A mediation hearing has been scheduled for March 31, 2016.

 

From time to time, in the ordinary course of ATRM’s business, it is party to various other disputes, claims and legal proceedings. In the opinion of management, based on information available at this time, such disputes, claims and proceedings will not have a material effect on ATRM’s consolidated financial statements.