Avant! to Pay $27 Million Settlement in Criminal Case Over Trade Secrets

Baldwin Louie — Tue, 22 May 2001 15:00:00 -0700

Avant! Corp. pleaded no contest Tuesday and agreed to pay at least $27 million to settle criminal charges alleging the theft of trade secrets from rival Cadence Design Systems Inc.

The plea agreement comes as the long-running case was on the verge of going to a jury trial in Santa Clara County Superior Court in California.

Among the defendants involved in Tuesday's deal were Avant Chief Executive Gerald Hsu, who pleaded no contest to counts of securities fraud, misappropriation of trade secrets and failure to return stolen property.

Avant (AVNT), which sells semiconductor-design software, will pay the maximum fine of $27 million and a hearing will be scheduled to determine additional restitution to Cadence, according to Clayton Parker, Avant's general counsel. Some of the defendants could face jail time, he added, though not Mr. Hsu, whose felony counts will be reduced to misdemeanors as part of the deal.

"Today's settlement removes the longstanding uncertainty surrounding the criminal case and also confirms that this dispute does not involve any tools currently sold by Avant," Mr. Parker said.

The case arises from charges that former Cadence employees who founded Avant stole some of Cadence's software code to build some of Avant's earlier products. However, Tuesday's action doesn't include a civil suit that was brought by Cadence. Mr. Parker declined to comment on the status of that case. Cadence officials weren't immediately available for comment.

Avant shares last changed hands at $17.84, down 71 cents, before they were halted midday Tuesday by Nasdaq Stock Market regulators for the release of material news. Avant, Fremont, Calif., is expected to issue a press release Tuesday and host a conference call Wednesday to discuss the settlement.

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Avant! to Pay $27 Million Settlement in Criminal Case Over Trade Secrets