3M is firing back at Porton Capital, a private equity firm, accusing its CEO Harvey Boulter of attempting to extort $30 million from the manufacturer to settle a lawsuit in the U.K. The company filed the case in the New York Supreme Court.
In its complaint, 3M says Boulter sent emails threatening the company's business in the U.K., as well as 3M CEO George Buckley's investiture as a Knight Bachelor. Buckley was named a knight by the Queen of England earlier this month, and he is slated to participate in an investiture ceremony later this summer, Twin Cities Business notes.
3M's case stems from a lawsuit that opened in London last week, with lawyers representing the U.K. government and the Porton alleging the multinational company breached its obligation on BacLite, a product designed for detecting MRSA in hospitals. Back in 2007, 3M spent $20.4 million to acquire the BacLite, which incorporated technology developed for the British military to detect an attack by biological weapons, from Acolyte Biomedica. 3M ultimately abandoned seeking regulatory clearance for the product, citing disappointing clinical results. Porton was extremely disappointed by the company's decision and has accused it of mismanaging the trials to protect Fastman, a 3M-developed detection product, from the less expensive BacLite.
But instead of allowing the case to move through the U.K. court system, Porton is resorting to extortion, 3M alleges in its suit. According to the company, Boulter, who says he has been given sole authority by the British Ministry of Defense to settle, admitted 3M may indeed prevail in the U.K. trial. However, even if it were to prevail, it would win the battle while losing the war. Indeed, a 3M victory "might leave [the British Government] quietly seething, with ramifications for a while--they have memories like elephants," 3M maintains court documents. But, says Boulter, if 3M were to settle the case for $30 million, it would allow the Defense Ministry to "internally save face."
The company says it has brought the suit to bring the defendant's "egregious and wrongful actions to light" and to seek compensation for harm caused.
A Porton Capital spokesperson said 3M's claims were "without merit" and criticized the company for making the correspondence public. "Under no conceivable circumstances could anything discussed in those conversations be interpreted as anything other than a good faith attempt to settle the case--there were no threats made, either explicit or implied. The decision by 3M's chairman Mr Buckley and his U.S. personal attorney to make public these confidential discussions--including private discussions with third parties--on a unilateral basis is shocking," the spokesperson said, as quoted by the Guardian.
- read 3M's complaint
- check out the Twin Cities Business report
- see the Guardian story