Atlantic Richfield - Ruling on Lawsuit

RNS No 4739m
ATLANTIC RICHFIELD COMPANY
9th December 1997 
 
 
 
NEW YORK COURT GRANTS SUMMARY JUDGEMENT IN FAVOUR OF ARCO IN LAWSUIT BROUGHT
BY SIEMENS SOLAR INDUSTRIES
 
Los Angeles, December 9 - A New York court has granted a summary judgement in
favour of ARCO (NYSE: ARC) in a lawsuit brought by Siemens Solar Industries
alleging that ARCO made fraudulent misrepresentations about its solar cell
technology when it sold its ARCO Solar, Inc. subsidiary to Siemens in 1990.
 
The lawsuit was filed four years ago by Siemens.
 
In a 48-page ruling yesterday (December 8) , N.Y. State Supreme Court
Justice Herman Cahn wrote that "the evidence before the court conclusively
demonstrates that Siemens entered into the stock purchase agreement with
actual knowledge of every material fact relevant to the commercial viability
of ARCO Solar's TSF (thin film silicon) technology."
 
The ruling further stated: "The record demonstrates that after
comprehensive due diligence and lengthy arms-length negotiations, Siemens
elected to buy what it knew were three unproven, money-losing technologies at
a fire-sale price."
 
Included in the lawsuit was a contention by Siemens that a number of e-mail
communications between ARCO Solar employees supported its claim of fraudulent
misrepresentation. Addressing this issue, Judge Cahn noted that all of the
e-mails were written after negotiations for the sale of ARCO Solar had been
completed, and some of them were written after the agreement had been signed.
 
"As such," he said, they do not evidence a plan of misrepresentation to
induce the acquisition. Rather they reflect a discussion over the best way to
influence the new corporate owner to adopt the technological strategy
apparently favoured by ARCO Solar's management. The e-mails present no
evidence of misrepresentations as to the state of TFS technology upon which
Siemens could have reasonably relied."
 
The ruling also said: "Siemens does not claim that any of the financial
information ARCO supplied regarding the technology during due diligence was
inaccurate or incomplete. Nor does Siemens assert that ARCO falsified any of
the scientific studies or data regarding TFS."
 
Contact: Albert Greenstein, tel USA 00 1 213 486 3384 or Tom Goff, tel 00 1
213 486 2456, both for ARCO, Web site: http://www.arco.com
 
 
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