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ORCC > SEC Filings for ORCC > Form 8-K on 13-Nov-2012All Recent SEC Filings

Show all filings for ONLINE RESOURCES CORP



Other Events

Item 8.01 Other Events

Online Resources Corporation (the "Company") is currently the defendant in a civil action lawsuit styled Kent D. Stuckey v. Online Resources Corporation, Case No. 2:08-CV-1188, which is pending in U.S. District Court for the Southern District of Ohio, Eastern Division. This lawsuit was filed on December 19, 2008 by Mr. Stuckey, the former Chief Executive Officer and Chairman of Internet Transaction Solutions, Inc. ("ITS"), alleging certain claims in connection with the Company's acquisition of ITS in August 2007. The plaintiff brought this suit in a representative capacity on behalf of all former ITS stockholders, alleging among other things that (i) the Company breached its agreement to register, under the Securities, Act of 1933, as amended, the Company shares that were issued to the former ITS shareholders, as partial consideration for the Company's acquisition of ITS, (ii) the Company committed fraud in connection with the acquisition of ITS and its failure to register the Company shares issued in the acquisition, (iii) the Company failed to timely process stock transfer requests, and (iv) the Company breached certain price protection provisions in the merger agreement.

On November 9, 2012, the trial judge issued a written bench opinion rejecting plaintiff's claims against the Company for common law fraud, punitive damages, costs of litigation (i.e., attorney's fees) and release of approximately $700,000 currently held in escrow, but ruling in plaintiff's favor and against the Company on the claims for (a) breach of the merger agreement, (b) rescission under the Ohio Securities Act, and (c) violation of the price protection provisions in the merger agreement. The bench opinion further provided plaintiff with 30 days to elect damage remedies between a total of approximately $18 million (including prejudgment interest) for breach of the merger agreement, or approximately $25 million, plus taxable court costs, for violation of the Ohio Securities Act. The bench opinion also awarded plaintiff approximately $100,000 (including prejudgment interest) for breach of the price protection provisions in the merger agreement.

The Company disagrees with the Court's decision and is continuing to review its legal options. The Company intends to seek appellate review of the bench opinion by the U.S. Court of Appeals for the Sixth Circuit once final judgment is entered.

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