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Saturday, November 14, 2009

Deadline for Luna settlement extended

The bankruptcy judge hearing the case gave lawyers another week to reach agreement on the $36.3 million judgment.

For the fourth time since Luna Innovations Inc. reached a tentative settlement of a $36.3 million civil verdict, the deadline for closing the deal has been extended.

In a letter to bankruptcy Judge William Stone dated Friday, attorneys for Luna and Hansen Medical Inc. said they were "working diligently" to finalize the settlement. Stone agreed to set a new deadline of Nov. 20.

In April, a California jury found that Luna stole trade secrets from Hansen as the two companies explored the possibility of working together to develop a catheter for high-tech surgeries.

The jury also found that Luna, which is headquartered in the Riverside Center medical complex in Roanoke, breached its contract with Hansen.

The $36.3 million verdict threatened to destroy Luna, and three months later the high-tech company filed for bankruptcy protection. As Luna reorganized its finances, it began discussions with Hansen about reducing the verdict to a sum it can afford.

At the time, Stone had already indicated in court filings that a $26 million portion of the verdict would likely be thrown out.

Attorneys for both companies told Stone in a Sept. 24 letter that they had established the framework of a settlement. But since then, four deadlines have been extended as discussions dragged on.

In an Oct. 30 letter, Stone told the attorneys that he was becoming concerned about the delays and the impact they may have on Luna's attempts to emerge from bankruptcy.

Attorneys plan to update Stone on the settlement talks at a conference scheduled for Monday.

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