United Kingdom-based private equity firm Porton Capital and its CEO, Harvey Boulter, on Thursday denied claims made by 3M Company that they tried to extort $30 million from 3M to settle a pending lawsuit.
Lawyers for Boulter and the firm said in a news release that 3M's allegations are a "false and reckless . . . publicity stunt disguised as a lawsuit."
3M filed its suit against Porton Capital and Boulter on Sunday. The company claims in the suit that Boulter made threatening remarks to both 3M and its CEO, George Buckley, in e-mail correspondence with 3M lawyers in which the two were discussing a possible settlement of a lawsuit. That lawsuit was filed in 2008 by Porton Capital and Ploughshare Innovations, Ltd., an entity controlled by the British Ministry of Defense.
Porton and Ploughshare allege in the 2008 suit that 3M "botched" a clinical trial for BacLite-a product that it acquired in February 2007 and took off the market in December 2008-and that 3M was irresponsible in its decision to take the product off the market. But 3M has maintained that the product was not commercially viable.
Attorney Lee Wolosky, who is representing Porton Capital and Boulter, said in a statement that 3M's accusations of blackmail are attempts to divert attention away from the BacLite trial-which started last week and is expected to continue into July. Wolosky added that 3M has not served its lawsuit but instead only sent copies of it to the media.
Boulter and Porton Capital also claim that the settlement discussions that 3M referred to in its suit were done "under mutually and explicitly agreed rules of confidentiality."
"[3M's lawyer] Mr. Brewer violated the rules of confidentiality regarding settlement negotiations by mischaracterizing statements made during a negotiation and using them as a basis for a lawsuit accusing me of blackmailing 3M," Boulter said in a statement.
Boulter and Porton Capital also claim that 3M's accusations that theythreatened to interfere with Buckley's pending knighthood are "patentlyabsurd." Earlier this month, Buckley was named a knight by the Queen ofEngland, and he's scheduled to participate in an investiture ceremony inEngland later this summer.
3M stands behind its lawsuit, saying that it did not commit an ethicalbreach by filing the suit and including the e-mail communications in thefiling.
"The threats contained in the e-mail communication from Mr. Boulter to Mr.Brewer are neither confidential under applicable law nor legitimate settlementdiscussions," Martin Pollner, partner at Loeb & Loeb and co-counsel for3M, wrote in an e-mailed statement. "I believe the communication is effectively an extortion demand, warningthat unless 3M immediately pays Porton more than $30 million, the U.K. governmentwill interfere with 3M's business interests in the U.K. and the knighthood for . . . Buckley will be called into question. Under those circumstances, webelieve the lawsuit is just, proper, and necessary."