11 April 2011

GigOptix settles dispute with stockholder DBSI

GigOptix Inc of Palo Alto, CA, USA, which designs modulator drivers, laser drivers and transimpedance amplifier (TIA) ICs based on III-V materials as well as polymer electro-optic modulators for 40–100Gb/s fiber-optic communications systems, has entered into a settlement agreement with the trustees of the DBSI Liquidating Trust and the DBSI Estate Litigation Trust.

The settlement arises from potential claims related to the bankruptcy of DBSI Inc. Affiliates of DBSI were investors in a predecessor of GigOptix, which resulted in them becoming stockholders of GigOptix. DBSI was the beneficial owner of the investment held by its affiliates. In November 2008, DBSI filed for bankruptcy. The DBSI Liquidating Trust now holds the shares of GigOptix stock and warrants to purchase 660,473 shares of GigOptix stock. The warrants have a weighted average exercise price of $32.35 per share with a range of exercise periods that expire between end-December 2011 and 23 April 2017.

The DBSI Estate Litigation Trust (an affiliate of the DBSI Liquidating Trust) has been evaluating various potential claims that it might assert against a number of entities, including GigOptix and certain affiliated parties. GigOptix’s management has engaged in discussions with the trustee regarding whether the DBSI Estate Litigation Trust has any claims against the firm. GigOptix has disputed the existence of any such claims, and intended to vigorously defend any claims made.

The settlement now resolves the disputed claims and completely eliminates all potential litigation. As part of the settlement, the trustees have agreed to the cancellation and return of the existing warrants to purchase 660,473 shares of stock. In exchange, GigOptix has agreed to issue to the DBSI Liquidating Trust two warrants which will not be exercisable for a period of six months from the date of issuance: one warrant for 500,000 shares that will have a term of three years and an exercise price of $2.60 per share, and one warrant, also for 500,000 shares, that will have a term of four years and an exercise price of $3.00 per share. The warrants may be exercised on a ‘cashless’ exercise basis. The trustees have also agreed to release their claims against GigOptix, its subsidiaries, directors and employees.

“Although we believed that the trustees’ claims would not have been successful, we were eager to avoid the legal expense, waste of management time and bandwidth, and the risk that is always associated with litigation,” comments GigOptix’s chairman & CEO Dr Avi Katz. “I am pleased we were able to resolve this issue with this significant GigOptix stockholder without any out-of-pocket cash costs.”

Tags: GigOptix

Visit: www.gigoptix.com

Join Semiconductor Today's LinkedIn networking and discussion group