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STAR Dynamics eyes settlement of Israel’s $6 million contract claim
By Kali Hays
New York, Sept. 17 – STAR Dynamics Corp. is seeking approval of a settlement agreement resolving a $6.56 million claim of Israel’s Ministry of Defense, according to a Wednesday motion with the U.S. bankruptcy Court for the Southern District of Ohio.
The claim is related to a contract between STAR and Israel in which the Ministry of Defense made advance payments totaling $6.56 million.
Under the contract, STAR was to provide Israel with various engineering services required to manufacture a mobile instrumental radar tracking system.
Israel asserts that STAR is in breach of the contract by failing to timely deliver the radar systems and filing for bankruptcy and said the unfulfilled portion of the contract equals $2.7 million of the advance payments.
STAR claims that the Ministry of Defense “improperly refused the first radar system, failed to sign-off on certain technical assistance agreements to facilitate site testing, and failed to make certain milestone payments causing significant damage,” according to the motion.
After “extensive negotiations” to avoid litigation, STAR agreed to an immediate cash payment of $2.9 million to Israel and both parties will release all claims against one another.
While STAR said it believes it would have claims against Israel and the Ministry of Defense that could benefit the estate, the agreement relives it of additional secured liability and does not require bankruptcy assets to resolve the claim.
STAR Dynamics, a Hilliard, Ohio-based instrumentation radar systems company, filed for bankruptcy on Dec. 10, 2013. The Chapter 11 case number is 13-59657.
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