Zoltek Companies Inc. (ZOLT) commented on a recent ruling in pending litigation against its Zoltek Corp. subsidiary brought by Structural Polymer Group Ltd.
The company expects that the ultimate resolution of the litigation will not have a material adverse effect on the company's business, financial condition or liquidity.
Zoltek previously posted a supersedeas bond of $23.5 million in order to stay the execution of the judgment against it pending final disposition of the appeal.
As of June 30, Zoltek had accrued $18.1 million with respect to this litigation. Zoltek said it expects to accrue an additional $6 million in respect of the potential liability in this matter during the quarter ended September 30.
On October 8, the United States Court of Appeals affirmed the district court's earlier denial of Zoltek's motion for a new trial and motion for judgement as a matter of law.
In addition, the Court of Appeals denied Structural Polymer Group's cross appeal of the district court's reduction of the jury's damages award. Zoltek may file a motion for rehearing by the full Eighth Circuit Court of Appeals or a further appeal.
Zoltek has filed a separate lawsuit in Federal District Court in St. Louis alleging that SP Systems breached its supply agreement and committed fraud against Zoltek. The company said it is claiming actual and punitive damages of in excess of $78 million in that suit, which it will continue to vigorously prosecute.
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