Cree stock jumped more than $1.50 a share at the opening of the market Tuesday when the company announced a settlement in the lawsuit filed by Eric Hunter and his wife, Jocelyn.
Cree said that “an agreement” had been reached to end the suit, pending approval by a federal judge in Greensboro where the suit was being heard. Cree said the settlement “does not require any payments to either Eric or Jocelyn Hunter.”
The Hunters had initially sought $3.2 billion in the suit, charing a wide variety of wrong-doing.
Hunter also has resigned as an employee and some of his remaining stock options have been “terminated,” according to a statement from Cree. The company said that the agreement included language “barring them from asserting the claims against Cree in the future.”
Hunter helped launch the company along with his brother, Neil, who is Cree’s chairman. Eric held a variety of positions with the company and a number of patents for technology used in Cree’s light emiting diodes (LED) and semiconductor process.
The deal was announced before the markets opened, and Cree (Nasdaq: CREE) stock jumped to $19.68 from $18.13 when trading began. By 11 AM, the stock was back down to $18.91. It closed at $18.49, up 36 cents or 2 percent.
Cree stock fell more than 40 percent to below $14 after the first suits were filed.
Hunter, a co-founder of the company, and his wife had sued Cree earlier this year, charging a variety of violations and saying the company was trying to intimidate him.
The Hunters’ suit also triggered a rash of class action suits on behalf of stockholders.
On Aug. 15, the judge in the case dismissed some of the Hunters’ claims initially but allowed the case to proceed.
Hunter also sued Charles & Colvard, another company he helped start. That suit was settled in October.
Cree: www.cree.com
