Venice Court awards Quantum Blockchain €6.1M in landmark case

Venice Court awards Quantum Blockchain €6.1M in landmark case As a tech journalist, Zul focuses on topics including cloud computing, cybersecurity, and disruptive technology in the enterprise industry. He has expertise in moderating webinars and presenting content on video, in addition to having a background in networking technology.

Quantum Blockchain Technologies has announced a significant legal development concerning its subsidiary, Clear Leisure 2017 (CL17).

On 10 June 2024, the Court of Appeal of Venice adjudicated judicial appeals made by CL17 in a lawsuit against former directors and statutory auditors of Sipiem in Liquidazione (Sipiem).

The court confirmed the majority of damages awarded to CL17, as announced on 1 November 2022. One of the ex-directors’ liability was slightly reduced by €105,412, resulting in total damages of approximately €6.1 million. Remarkably, the court dismissed all other appeals by the Sipiem defendants except for this minor reduction.

This was a significant step because, for the first time, the court upheld the liability of Sipiem’s former directors, statutory auditors, and extended it to include the members of the internal audit committee, and the family members of the main defendant. This extension affected parties for whom the enforcement of the lower court’s judgment had previously been stayed pending appeal.

As a result of this ruling, CL17 is now in a position to enforce the judgment for a total of €6,083,562 in damages, plus interest and inflation adjustments to accrue from different dates until the date of satisfaction of the judgment. The court also ordered the defendants to pay €85,499 in legal costs associated with the trial court order and €48,677 for the appellate rulings, the costs of which were to be borne by an insurance company insuring one of the defendants.

The ruling nullified a €700,000 private settlement offer previously reported on May 16 and June 4, 2024. The settlement was to be approved at a hearing; however, this hearing was not held until after the release of this state appeals court ruling, which voided the agreement. The fee payable to the Sipiem Receiver from recoveries net of legal fees will respect CL17’s original agreement provided that it does not exceed 30% of such recoveries.

Quantum Blockchain is monitoring the situation and seeking advice. It is also engaging in discussions with the receiver, the lawyers of their statutory auditors, and the insurers’ lawyers about the contractual consequences of this relief from the settlement. The company said it would provide an update on these discussions as soon as possible.

Of particular note, the court ordered Sipiem’s statutory auditors to pay €1,000,000 as part of the total judgment, an increase from the previously agreed €700,000 in the now-voided settlement. This amount is included in the total €6,083,562 damages award.

Francesco Gardin, the executive chairman of Quantum Blockchain Technologies, expressed satisfaction with the court’s decision, stating, “We are extremely pleased with the Venice Court of Appeal result, which confirms the previous ruling while extending the scope of its enforceability.” Gardin emphasised that CL17 will now focus on collecting the awarded damages, interest, and adjustments for inflation, ensuring maximum effort to recover the funds from the defendants.

This legal victory represents a significant development for Quantum Blockchain Technologies and its subsidiary. The company’s next steps will involve diligent efforts to collect the awarded funds, potentially impacting its financial position in the coming months. The company has assured stakeholders that it will make the maximum effort to seek and collect the funds from the defendants.

This announcement has been determined to contain inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014, as it forms part of UK domestic law under the European Union (Withdrawal) Act 2018 (‘MAR’), and is disclosed per the company’s obligations under Article 17 of MAR.

Through future announcements, stakeholders are encouraged to stay updated on efforts to recover funds and on any additional legal matters related to this complex case.

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