IBEX Technologies Inc.
TSX VENTURE : IBT

IBEX Technologies Inc.

September 30, 2014 10:07 ET

IBEX Provides Update on Garvinci Suit

MONTREAL, QUEBEC--(Marketwired - Sept. 30, 2014) - IBEX Technologies Inc. (TSX VENTURE:IBT) today provided an update on the status of its litigation with Garvinci Inc. ("Garvinci") and its owner, Mr. Jean François Gareau.

BACKGROUND

In 2006 and 2007, as part of a later aborted acquisition arrangement, IBEX loaned Garvinci Inc. a total of $1,000,000 with interest at 12%. These loans were personally guaranteed by Mr. Jean François Gareau, the principal shareholder of Garvinci. These loans became due and payable on May 7, 2008.

Having received no payment, in January 2009, the Company and Garvinci entered into a new agreement (the "Escrow Agreement") in which, among other things, Garvinci agreed to share in the sales revenue from its sales to a customer in return for a reduction in the interest rate from 12% to prime rate plus 1%. This agreement did not release Garvinci or Mr. Gareau from their obligations under the loan agreements.

In September 2009, the Company determined that Garvinci had not abided by the essential terms of the Escrow Agreement, whereupon the Company unilaterally cancelled the Escrow Agreement and reverted to the terms for its original loan agreement.

In October 2010, IBEX filed an action against Garvinci and Mr. Gareau in the Quebec Superior Court demanding payment for the principal and outstanding interest.

In May 2011, the Quebec Superior Court allowed the IBEX claim to proceed with a trial date set for April 8, 2014.

RECENT EVENTS

At trial, Mr. Gareau argued that, as a result of the Escrow Agreement, he was not personally responsible for the IBEX loans to Garvinci; that IBEX had erred in the unilateral cancellation of the Escrow Agreement; and that Garvinci was owed unspecified damages.

The Quebec Superior Court rendered a ruling on April 15, 2014 which found that:

(a) Mr. Gareau was in fact liable for the IBEX loans to Garvinci; but that,

(b) IBEX in fact did not have the right to unilaterally cancel the Escrow Agreement despite Garvinci's failure to perform and that,

(c) The Escrow Agreement had a term which did not expire until December 20, 2014; and therefore,

(d) IBEX had brought its case prematurely; and that,

(e) Garvinci and Gareau were not entitled to any damages.

On July 30, 2014, IBEX refiled a new claim arguing that in fact the Escrow Agreement had expired by virtue of the cancellation of Garvinci's agreement with its supplier, and the non-performance of Garvinci.

On September 10, 2014, Mr. Gareau filed a motion to dismiss.

Both motions were slated for a hearing on September 12, 2014 however at this hearing the Court, citing the complexity of the motions, decided to postpone the arguments to a later date, which has been set for January 6, 2015.

LOOKING FORWARD

IBEX will vigorously continue to pursue its claim, encouraged by finding of the Court that Mr. Gareau is personally responsible for the loans to Garvinci.

ABOUT IBEX

IBEX, through its wholly owned subsidiaries IBEX Pharmaceuticals Inc. (Montreal, QC) and Bio-Research Products, Inc. (North Liberty, IA), manufactures and markets proteins for biomedical use. IBEX Pharmaceuticals Inc. also manufactures and markets a series of arthritis assays which are widely used in osteoarthritis research.

For more information, please visit the Company's website at www.ibex.ca.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Safe Harbor Statement

All of the statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, as they are based on the current assessment or expectations of management, inherently involve numerous risks and uncertainties, known and unknown. Some examples of known risks are: the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which IBEX does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation or otherwise. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. IBEX disclaims any intention or obligation to update these statements, except if required by applicable laws.

In addition to the risk factors identified above, IBEX is, and has been in the past, heavily reliant on a few key products and customers, the loss of any of which could have a material effect on profitability.

Contact Information

  • Paul Baehr
    President & CEO
    IBEX Technologies Inc.
    514-344-4004 x 143