Stemming from GXI's first contract with American Airlines a few years back, this is a long-term legal action that cost several hundred thousand dollars per annum in legal expenses for Guestlogix. The dismissal of the suits should have a small but immediate beneficial impact on earnings , and also reduce investor uncertainty regarding intellectual property and the potential for some future royalty payments related to a settlement. The outcome also reduces the chances that GXI would be required to purchase Abanco assets in order to solidify IP rights. The outcome should be viewed as positive for the stock.
Attached is the press release.
GuestLogix and Abanco Reach Settlement Agreement
TORONTO, ONTARIO, Sep. 21, 2009 (Marketwire) --
TORONTO, ONTARIO -- (Marketwire) -- 09/21/09 -- GuestLogix Inc. (TSX VENTURE: GXI) and Abanco Investments, LLC (and Abanco-related entities Abanco, LLC and Abanco International, LLC) have entered into a settlement agreement that resolves their lawsuits pending in the United States District Court for the Northern District of Illinois and the Ontario, Canada, Superior Court of Justice.
Under the terms of the settlement, Abanco and GuestLogix agreed to dismiss their claims, with prejudice, and neither party is required to make any cash payment or to provide any compensation to the other.
GuestLogix (TSX VENTURE: GXI) is the leading provider of onboard retail technology and solutions to the passenger travel industry. Through its industry standard onboard transaction processing platform, the Company provides carriers the tools to become successful onboard retailers and by way of its OnTouchTM merchandising division it facilitates innovative products and services to enhance passenger experience and propel ancillary revenue growth. With a customer base comprising 9 of the top 10 global airlines GuestLogix maintains contracts to serve more than 35 per cent of the world airline passenger traffic via its proprietary platform based on the 2008 passenger data compiled by Air Transport Intelligence (ATI). Additional information on the Company can be found at guestlogix.com and ontouch.com.
© 2009 GuestLogix. All Rights Reserved. All other trademarks and trade names are the property of their respective owners.
This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with GuestLogix' business and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts, but reflect GuestLogix' current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risks and Uncertainties" in the Filing Statement filed on June 29, 2009 with the regulatory authorities. GuestLogix assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Disclosure: I do not own shares of GXI.V