Cybex International, Medway, MA, spent much of 2011 with clouds hanging over its head due to a $66 million verdict against it in December 2010 in the Barnhard v. Cybex International Inc. lawsuit and two threats of delisting from the NASDAQ Stock Market. The year ended with both issues likely being continued into 2012.
Last month, the Supreme Court of the State of New York, Appellate Division, upheld that Cybex was negligent in the Barnhard case in which a piece of Cybex equipment fell on a woman, rendering her a quadriplegic, but the court reduced the jury award to about $44 million, for which Cybex is 75 percent liable. Cybex says it will appeal the decision to the Court of Appeals of the State of New York. The company also says it is exploring ways to protect itself if the court elects not to hear the case.
The court’s decision not to reverse the verdict or reduce the award further might make it more difficult for Cybex to meet NASDAQ’s requirement that it have a minimum shareholder equity of $10 million. Cybex now has until Jan. 2, 2012, to meet this requirement and until March 12, 2012, to meet its requirement that Cybex’s closing stock bid remain above $1 for more than 10 consecutive trading days. NASDAQ granted these extensions on the original deadlines last month.
Despite these issues, Cybex experienced sales growth for the first three quarters of 2011.