Nilimedix (now Spring Health Solutions Ltd.) founder Dr. Avraham Shekalim is suing its parent company D Medical Industries Ltd. (Nasdaq: DMED); TASE:DMED) for NIS 350,000. In the statement of claim filed with the Haifa District Court, Shekalim contends that D Medical acted in bad faith by using threats and intimidation to withhold money owed him. He invented the technology underpinning the product, an insulin pump, on which D Medical's business is now based.
Shekalim also contends that D Medical prevented him from helping correct flaws in Nilimedix's insulin pump, but corrected them itself in an amateurish way. He asserts that D Medical concealed this information from the public, and unilaterally and humiliatingly fired him from Nilimedix.
D Medical has not yet filed a statement of defense.
In 2008, D Medical took over with consent Nilimedix's patents, and signed an agreement with Shekalim to set up a company to produce the components for the disposable insulin pump, which would be sold to Nilimedix at cost. He claims that D Medical recorded the company's cost disproportionately in favor of Nilimedix, in which he was no longer a partner.
D Medical's share price rose 8.3% on Nasdaq on Friday to $1.95, giving a market cap of $15 million, but fell 5.5% on the TASE today to NIS 7.01.
Published by Globes [online], Israel business news - www.globes-online.com - on September 25, 2011
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