Sphere 3D Announces Favorable Ruling and Dismissal of Lawsuit
SAN JOSE, Calif., Oct. 11, 2017 (GLOBE NEWSWIRE) -- Sphere 3D Corp. (NASDAQ:ANY), today announced that the Commercial Division of the Supreme Court of the State of New York has granted to its wholly-owned subsidiary, Overland Storage, summary judgment on all claims brought against Overland by Special Situations Fund III QP, L.P., Special Situations Private Equity Fund, L.P., Special Situations Technology Fund, L.P., and Special Situations Technology Fund II, L.P. (collectively, the "Special Situations Funds") under a December 2010 litigation funding agreement.
In December 2010, Special Situations Funds invested in a patent litigation brought by Overland through an agreement containing a change-of-control provision under which the Special Situations Funds would receive a $6 million payout if Overland undertook a transaction falling within the provision before the patent litigation was resolved.
In January 2014, Overland acquired Tandberg Data Holdings S.?.R.L. In May 2014, the Special Situations Funds sued Overland in the Commercial Division of the Supreme Court of the State of New York, claiming that they were entitled to a payout because Overland's acquisition of Tandberg allegedly fell within the change-of-control provision.
Overland subsequently settled the patent litigation in a manner that triggered no payment to the Special Situations Funds. The Special Situations Funds then amended their complaint to claim alternatively that Overland had breached the implied covenant of good faith by settling the patent litigation in a manner designed to avoid a payment obligation to them. After the close of discovery, the parties filed cross-motions for summary judgment. On October 10, 2017, the Court entered an order granting Overland's motion for summary judgment and dismissing the Special Situations Funds' complaint in its entirety with prejudice.