- ClearOne previously reported in its periodic filings that it expected resolution by the end of 2012 of two pending arbitration matters concerning auction rate securities sold to ClearOne by Morgan Stanley & Co., Inc. and UBS Financial Services, Inc.
- ClearOne has determined the outcome of both matters, involving substantially identical claims against two different parties, effective January 14, 2013.
- With respect to the Morgan Stanley arbitration, the arbitration panel denied ClearOne's claims in their entirety.
- With respect to the UBS arbitration under a different panel ClearOne has settled its dispute for a total amount of forty-five million dollars ($45,000,000), effective December 10, 2012. The settlement agreement was subject to a confidentiality provision pending resolution of the Morgan Stanley arbitration matter described immediately above. The settlement award is subject to a 15% contingency legal fee payable to ClearOne's litigation counsel. The UBS settlement proceeds have been held in a trust account pending resolution of the Morgan Stanley matter and will be disbursed to ClearOne shortly, with interest, less the contingency fee paid to ClearOne's legal counsel.
- "We are pleased the litigation surrounding auction rate securities has been settled in favor of ClearOne," said Zee Hakimoglu, president, chief executive officer and chairman of ClearOne. "We will carefully evaluate over time, opportunities available to us and use the cash for selective infusions of technology, sales & marketing, infrastructure, and other investments to fuel our growth, as well as acquisitions that may strategically fit our business and are accretive to our performance."
