Burnaby's WebTech Wireless Inc. (TSX:WEW) has won an appeal of an earlier Brazilian court judgment against it in a case of business interference filed by Crown Telecom, WebTech's former Brazilian distributor.
Last year, Crown had obtained a judgment against WebTech from a Brazilian lower court that had included a $60 million claim against the company. WebTech appealed on the basis that due process was not followed in the case because it was not given the opportunity to present evidence or respond to Crown's accusations.
"We are obviously pleased to have won this appeal," said Scott Edmonds, WebTech's CFO. "This decision allows us to focus without distraction on expanding our business presence in Brazil."
The legal issues with Crown began in 2007 when the telecom effectively stopped making payments on a loan agreement with WebTech. At the time, Crown was the sole Brazilian distributor of WebTech GPS-based fleet management systems.
Crown's financial troubles seriously affected WebTech's results in 2007 as the company reported a $26.2 million loss for the year compared with a $1.1 million profit in 2006. The company said $22.2 million of the loss was directly related to the issues with Crown.
The company recovered a year later with revenue rising 33% to $20.8 million from $15.3 million and the company's net loss falling to $7.8 million.
In its most recent quarter ending March 31, 2009, WebTech reported a small $115,000 net profit.
WebTech's share price range during the past week: between $1.44 and $1.52; 52-week high: $3.15; 52-week low: $0.70.