Tecnomatic sues Remy for $110 million over hybrid stator fraud

Tecnomatic is suing Remy for $110 million for "fraud and breach of fiduciary duty" over something we have to assume most readers haven't ever heard much about: proprietary stator technology and stator winding technology. A stator, as Wiki tells us, is the stationary part of a rotor system, for example in an electric motor (and other items). It's those electric motors that are key here, since they can be used in electric and hybrid vehicles. In fact, Remy products are used by MotoCzysz, Amp Motors, Zap, Daimler and others. Whether these companies use any technology involved in this case not clear, but it doesn't seem like it.
Basically, Tecnomatic's lawsuit claims that it shared information about the technology with Remy because the two companies were considering forming a joint venture. Then, Tecnomatic alleges, Remy went out and got a $60 million grant through the American Recovery and Reinvestment Act by falsely claiming the technology belonged to Remy alone:

Specifically, one or more of the Remy Defendants improperly accessed the Grant money by representing, in the Grant application and elsewhere, ownership and intended use of proprietary stator technology and stator winding technology, as well as technology related to the manufacture of the same, that the Remy Defendants misappropriated and otherwise wrongfully obtained from Tecnomatic.

Remy issued a statement that says Tecnomatic's accusations are "baseless" and "are false and totally without merit." Remy also says that Tecnomatic is "desperate" to force a settlement in a 2008 complaint that Remy filed against Tecnomatic and which is about to go to trial. Remy is also promising it "will vigorously fight these claims and pursue all remedies for Tecnomatic's abuse of the judicial process, including damages for false claims." We're guessing the JV is pretty much off the table at this point.

You can read Tecnomatic's full complaint here (PDF) and see Remy's response after the jump. Read about other legal cases concerning hybrid vehicles here.

[Source: Tecnomatic]
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Tecnomatic S.p.A. Charges Remy, Inc. With Fraud And Breach of Fiduciary Duty

Lawsuit Claims Remy, Inc. Made False Statements In Application For $60 Million Federal Grant

CHICAGO (March 10, 2011) – Tecnomatic S.p.A., an international maker of stator technology used in hybrid and electric automobiles, filed a $110 million lawsuit today in United States District Court for the Northern District of Illinois against Remy, Inc. (OTC: RMYI.PK). The suit charges Remy, Inc. and others with multiple counts of fraud, breach of fiduciary duty, unfair competition and negligent misrepresentation. A full copy of the complaint can be found online at http://bit.ly/gMMkbJ.

The lawsuit claims that proprietary technology developed by Tecnomatic S.p.A. was improperly secured by Remy and referenced in Remy's application for $60 million in taxpayer grants from the United States Department of Energy (DOE) in October 2008. According to the complaint, at least one former Remy employee has submitted sworn testimony demonstrating that the company's application to the DOE included technical materials developed by Tecnomatic S.p.A.

"After several attempts at settlement, we are extremely disappointed to have brought this lawsuit against one of our customers," said Giuseppe Ranalli, President and CEO of Tecnomatic S.p.A. "Theft of intellectual property is something we take very seriously, and we fully intend to pursue this action until our claims have been satisfied."

Tecnomatic S.p.A. is the originator of complex stator winding technology. Since its founding in 1973, the company has developed manufacturing systems that make complex stators, which are used as a key component of electric motors including those used by the hybrid automotive industry.

"We acted in good faith over the course of four years under the pretense that Tecnomatic would be working together with Remy as part of a joint venture," Ranalli said. "Instead, we now have an adversary that has wrongfully adopted our technology as their own to establish a significant presence in this market."

The lawsuit details 15 separate charges including fraudulent misrepresentation, misappropriation of trade secrets and breach of fiduciary duty. In addition, the suit claims that during a period of mutual confidentiality, Remy modified drawings and documentation supplied by Tecnomatic S.p.A. in order to conceal its true origin. This material was instrumental in successfully securing a $60 million grant as part of the American Recovery and Reinvestment Act.

About Tecnomatic S.p.A.
Tecnomatic S.p.A. is a leading supplier of product industrialization and process development systems used in the design and manufacturing of special machine and automatic assembly lines. The firm was established in 1973 as a builder of equipment assembly lines for automotive components. Following the arrival of Mr. Giuseppe Ranalli as CEO in 1998, Tecnomatic began an aggressive period of international expansion that included significant investment in research, development and human resources. Today, Tecnomatic develops automated assembly systems for a wide array of automotive components including alternator stators, turbochargers, electric motors, heat exchangers, starters, latches, wiper motors, ignition coils, engines, electric steering, air bags, glow plugs for diesel motors and other components. Customers have included Honeywell Turbo Technologies, Valeo, Ferrari, General Motors, Continental Temic, Magneti Marelli, Ford Motor Company, VM Motori, TRW, Denso, Magna, Dong Feng, Pierburg Pump Technologies (PPT), ABB and GKN, among others.

Tecnomatic is headquartered in Italy with offices in India , Shanghai , Brazil , and Romania.

Remy International's Response to Tecnomatic Lawsuit
PENDLETON, Ind., March 10, 2011 /PRNewswire/ -- Remy International, Inc. responded that the allegations made yesterday by Tecnomatic, S.p.A. in its lawsuit against Remy are false and totally without merit. Remy filed a complaint against Tecnomatic in September, 2008 in Indiana District Court. Remy believes that this new lawsuit is a desperate attempt by Tecnomatic to force a settlement of this pending case as it nears trial.

Remy released the following official statement to the press this afternoon:
"Remy has been in business for over 100 years making quality rotating electric products. Remy's integrity is well known in our industry. It is unfortunate that Tecnomatic has filed a baseless lawsuit for a competitive advantage using false statements about Remy and its technology. Remy will vigorously fight these claims and pursue all remedies for Tecnomatic's abuse of the judicial process, including damages for false claims."

About Remy International, Inc.
Remy International, Inc., headquartered in Pendleton, Indiana, is a leading global manufacturer, remanufacturer and distributor of light duty starters and alternators and Delco Remy brand heavy-duty systems. Remy International also manufactures and distributes electric propulsion motors designed with leading-edge technology and backed by the security of over a billion miles of proven reliability. In business for over 100 years, today Remy International is actively collaborating with companies throughout the world to develop innovations that are transforming the vehicle industry. Recently, Remy International was recognized by the United States Department of Energy for its leadership role in the hybrid technologies space and awarded a $60 million grant under the Electric Drive Vehicle Battery and Component Manufacturing Initiative.

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