Medtronic to Pay Etex $50 Million
A California arbitrator ordered Medtronic, a maker of pacemakers and other medical devices, to pay $50.2 million plus interest to privately held Etex for breaching a contract, Medtronic said.
The arbitrator ruled that the Minneapolis company violated a 2002 contract with Cambridge, Mass.-based Etex by refusing to accept a proposed bone graft product from Etex. Under the contract, Medtronic had agreed to buy Etex contingent on Etex developing a product that met certain technical specifications and other conditions. Medtronic claimed that the Etex product failed to meet the agreed conditions.
Medtronic said it will record an expense in its fourth quarter ending in April related to the damage award, but does not expect the payment to have long-term financial implications. The decision is not appealable.