Rosetta Genomics Ltd. (Nasdaq:ROSG) has sued spin-off Rosetta Green Ltd. (TASE: RSTG), a month after it announced the sale of its activities to Monsanto Company (NYSE: MON) for $35 million. Rosetta Genomics, the former controlling shareholder in Rosetta Green, will see no money from the sale, and it is demanding its share. Rosetta Green counters that the lawsuit is baseless.
Rosetta Genomics spun off Rosetta Green in 2008 to use the company's micro RNA technology for crop bioengineering. The companies parted ways in 2010, and Rosetta Green went public on the TASE. Financially troubled Rosetta Genomics, which owned almost half of Rosetta Green, later sold its stake for just $900,000, plus up to $2 million in milestone payments, to Plan B Ventures and Alexander Rabinovitch. Rosetta Genomics retained first refusal rights to the sale of the shares to a third party under the founding agreement of Rosetta Green.
Rosetta Genomics argues that Rosetta Green may not transfer to Monsanto the intellectual property given by Rosetta Genomics when it founded Rosetta Green. It also claims 7.5% of the sale proceeds, and that Monsanto should assume Rosetta Green's liabilities under the licensing agreement with Rosetta Genomics, to which Rosetta Green is bound.
Rosetta Green counters that Rosetta Green's software is not being transferred under the sale of its assets to Monsanto, that Rosetta Genomics is not entitled to royalties as part of a transaction of this kind, and that Monsanto is assuming Rosetta Green's relevant liabilities to Rosetta Genomics under the licensing agreement. Therefore, Rosetta Green is not required to provide any guarantees.
Published by Globes [online], Israel business news - www.globes-online.com - on March 4, 2013
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