3M Accuses British Firm and its CEO of Blackmail
3M Company on Sunday filed a lawsuit alleging that United Kingdom-based private equity firm Porton Capital and its CEO Harvey Boulter attempted to extort $30 million from the Maplewood-based manufacturer.
According to the lawsuit, which was filed in New York Supreme Court, Boulter sent e-mails to 3M's legal counsel that allegedly threatened the company's business interests in the United Kingdom and its CEO, George Buckley.
3M claims in the suit that it began corresponding with Boulter to discuss a possible settlement in a lawsuit that 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 they argue that 3M was irresponsible in its decision to take the product off the market.
3M has maintained that the product was not commercially viable. Donna Fleming Runyon, a 3M spokeswoman, told Twin Cities Business in May that the company purchased the product “with the expectation that it was fully developed and ready to market, but it wasn't.” The trial for the BacLite lawsuit started last week and is expected to continue into July.
3M said in its just-filed lawsuit that Boulter acknowledged in his e-mails that 3M may prevail in the BacLite lawsuit and wrote that a $30 million settlement that Porton and Ploughshare were seeking “has little to do with the case in the court” but would prevent the British Defense Ministry from “losing face.”
According to the suit, Boulter said that the British government could retaliate against 3M if it won the BacLite suit by making it difficult for the company to do business in the United Kingdom. Even if 3M prevails in the suit, the victory “might leave [the British Government] quietly seething, with ramifications for a while . . .” Boulter allegedly wrote to 3M.
3M also claims in its suit that Boulter's e-mails threaten to interfere with Buckley's pending knighthood. Earlier this month, Buckley was named a knight by the Queen of England, and he's scheduled to participate in an investiture ceremony in England later this summer.
“Instead of awaiting the outcome of the pending litigation, defendants and their investors have engaged in an unlawful campaign to blackmail 3M into paying . . . [$30 million] in order to avoid the continuation of the campaign by which defendants seek to publicly defame 3M and its chairman/CEO and to tortuously interfere with 3M's legitimate business pursuits in the U.K.,” 3M said in its suit.
3M is Minnesota's fifth-largest public company based on its 2009 revenue, which totaled $23.1 billion. The company reported revenues of $26.7 billion in 2010.