REVIER BEACH, Fla., Sept. 13 /PRNewswire/ -- In a 16 page decision rendered on August 11, 2006 the Arbitrator in the earnout dispute between Vital Signs and the former shareholders of HealthStar Pharmaceutical Services, Inc. acquired by Vital Signs in 1995 rendered an opinion in favor of the shareholders. The shareholders were awarded $915,333.00 in the decision. According to the terms of the 1995 Definitive Purchase Agreement between the companies the arbitration award is binding.
Background
On December 6, 1999 the former shareholders of HealthStar Pharmaceutical Services (HPS) represented by William J. Grabowski as Shareholder Representative filed suit in Federal District Court in Newark, New Jersey against Vital Signs, Inc. The suit alleged that Vital Signs conspired to deprive the former earnout shareholders of their additional payments by charging the earnings of HPS with the R & D costs of Vital Sign's failed Vasceze Catheter Flush product. In 2000 Vital Signs filed a motion with the court seeking to have the earnout dispute portion of the case heard in an arbitration format as provided by the contract. While the plaintiffs opposed the motion, on August 3, 2000 the Honorable John Bissell, United States District Judge ordered that the plaintiffs submit their claims to the binding audit process set forth in the agreement and administratively stayed all proceedings until the conclusion of the arbitration with the right to reopen the matter at that time.
In spite of the binding nature of the arbitration, Vital Signs has refused to pay the award. The plaintiffs are now assessing their options with the advice of their attorneys.
For additional information, please contact:
William J. Grabowski
781-961-5400 ext. 104
Shareholder Representative for HealthStar Pharmaceutical Services
