WASHINGTON (CN) - Symantec filed a bogus notice of a claim of liability to avoid pay more than $18 million to shareholders of SwapDrive, shareholders and former shareholders say in Federal Court. Symantec acquired SwapDrive, a software company specializing in online data backup and storage, in 2008.
Plaintiff Core/SD Representative Fund represents SwapDrive's former shareholders, option holders and warrant holders.
It claims Symantec violated the merger agreement by submitting a claim for damages that did not identify "any damages that Symantec incurred, paid, reserved or accrued," and failed to "describe damages in an aggregate amount greater than $250,000."
According to the merger agreement, the shareholders say, a valid claim alleging fraud, willful breach or intentional misrepresentation must be filed against SwapDrive within the 9 months that the money was to be held in escrow for Symantec to rightfully withhold the escrowed funds.
They claim Symantec had its escrow agents put a hold on the $18 million without indicating any such claim.
The shareholders ask the Federal Court to order Symantec to withdraw its notice of claim, and compensatory and punitive damages.
They are represented by John Corrado with Morrison Foerster.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.