Biolitec Ordered to Pay $74.9 Million to AngioDynamics

Biolitec AG was ordered to pay $74.9 million to AngioDynamics Inc. by a U.S. judge after the German medical laser maker’s chief executive officer failed to show up for questioning in a contract lawsuit.

“Throughout the course of this litigation, nearly half a decade in length, defendants have tried to circumvent the judicial process and evade accountability,” U.S. District Judge Michael Ponsor in Boston said in his ruling today over the damages amount.

AngioDynamics, a distributor based in Latham, New York, claimed in a lawsuit that Biolitec diverted assets via a merger with an Austrian unit to avoid a $16.5 million judgment imposed by a New York federal court, according to court papers.

The judge said Biolitec’s conduct “evolved from evasive, to delinquent, to grossly contumacious,” leaving him no choice but to rule in AngioDynamics’ favor and triple the damages.

Ponsor penalized the company and Chief Executive Officer Wolfgang Neuberger for refusing to travel to Boston to answer questions by AngioDynamics lawyers.

Contempt Citation

Neuberger didn’t come to the U.S. because he feared a contempt citation for pushing through the merger over the judge’s ruling, which barred the merger, Ponsor said. The CEO can’t use Biolitec’s failure to comply with the order barring the merger as an excuse to avoid the deposition, he said.

Biolitec was accused in the underlying lawsuit in New York of failing to indemnify AngioDynamics for patent-infringement claims over products the German company made and AngioDynamics sold.

AngioDynamics subsequently sued in Boston federal court, claiming Biolitec diverted assets to avoid paying the judgment, according to Ponsor.

The judge’s opinion “is the latest in a series of decisions by the district court that mischaracterize or ignore defendants’ legal arguments,” Edward Griffith, a lawyer for Biolitec, said in an e-mail.

“The default itself is another improper and punitive sanction” that the company is appealing and expects to win, Griffith said.

The U.S. case is AngioDynamics Inc. v. Biolitec AG, 09-30181, U.S. District Court, District of Massachusetts (Boston).

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