BURNABY, B.C. - Photon Control Inc. has been ordered to repay $374,562 in debt to its former president after it wrongfully dismissed and rescinded a loan agreement with him.
The Vancouver-area measurement technology company (TSXV:PHO) said Tuesday the Supreme Court of British Columbia has ruled the company did not have the right to end a loan agreement reached with former president John Kidder.
It had taken action against Kidder, saying it properly ended the agreement and debt owned to Kidder would be repayable in shares of the company at a rate of one share per dollar of debt, which stood at $340,887 at the time.
The company already booked a charge of $310,499 for the debt as a long-term liability on its financial statements, which will now be recorded as a short-term liability.
The court also ruled that Kidder was dismissed without cause in 2001. It awarded him 18 months notice at $130,000 per year in salary, plus the value of the benefits payable to him.
It has not yet ruled on the issue of costs to be paid in relation to the litigation, and the company is not able to confirm the final charge that will be recorded in its third-quarter report.
The company said it is considering its options regarding the decision.
Shares fell 8.3 per cent to close a penny lower at 11 cents apiece Tuesday before the company made the announcement.