In the latest episode of the legal soap opera embroiling SafeCard Services Inc. and its founder and former chairman, Peter Halmos, the company has proclaimed a substantive victory in an Illinois court.
SafeCard said a "significant portion" of a lawsuit against it and one of its directors had been dismissed by the court.
A company spokesman said most of SafeCard's potential liability was in those portions of the suit dismissed with prejudice. That means Mr. Halmos cannot continue to pursue those parts of his litigation, though he can appeal the decision.
Mr. Halmos has sued in multiple jurisdictions, alleging various breaches of contract and seeking monetary damages from SafeCard and its directors.
Last December, the former executive was among a handful of investors who filed a class action in Miami, accusing current officers and directors of stock manipulation. SafeCard chairman and chief executive Paul Kahn, who had not been mentioned directly in earlier litigation, was named as a defendant.
Mr. Halmos said in a statement last week that he would "prosecute vigorously those claims on appeal (in Illinois) and is pushing forward with the indemnification claims against SafeCard that remain pending under the lawsuit."
In the latest of a series of blistering press-release attacks, he added: "The court's decision . . . does not excuse the improper and self-serving behavior of those associated with SafeCard who betrayed me and repudiated SafeCard's obligations to me. Their bad-faith conduct has resulted in the extensive litigation and represents an extremely costly waste of SafeCard's shareholder assets."
SafeCard's spokesman said: "We can't comment on the future plans of Mr. Halmos. We'll just have to wait and see what happens."
While the company reported a net loss of $49.9 million for the two months ended Dec. 31 (see above), the major cause was a $65.5 million pretax accounting charge unrelated to the litigation.
For the fiscal year that ended Oct. 31, SafeCard recorded about $8 million of legal costs, of which $1.2 million came in the fourth fiscal quarter.