Former President of Definicon Suing Company : Litigation: John S. Abram claims that he was fired for speaking out against the firm’s activities and is seeking damages for wrongful termination.
SANTA ANA — The former president of Definicon International Corp. has sued the electronics firm and its majority owner, Bernard B. Katz, for wrongful termination, alleging that he was fired after he spoke out about financial irregularities at Definicon and its parent company.
The suit was filed Nov. 15 in Orange County Superior Court in Santa Ana by John S. Abram, former president and chief operating officer of Definicon, a computer company that was acquired by Helionetics Inc. last year. The suit also names Helionetics as a defendant.
Katz is chairman of Definicon and Helionetics, both based in Irvine.
Katz said Monday that the suit is “without merit and we will be filing the appropriate counterclaims against Mr. Abram. We will request a jury trial.â€
In his suit, Abram is seeking $95,000--the equivalent of one year’s salary--plus other damages. The suit alleges that Definicon violated its employment contract with him by withholding a paycheck and other compensation and then firing him on Aug. 14.
Abram alleges that he was fired after he told Definicon’s directors that Helionetics was making misrepresentations and failing to disclose material information to shareholders, the news media and the Securities and Exchange Commission.
“The act of termination was taken in order to conceal and hide the truth of the unlawful and improper activity,†the suit alleges.
Katz said Abram resigned from the company.
“It is quite evident from recent events that the pre-tax earnings potential of Definicon is being sacrificed to benefit Helionetics,†Abram wrote in an Aug. 9 letter to Helionetics, which was included in a court filing. He said the events included reduction in Definicon’s staff and the “upstreaming†of revenue to Helionetics.
Abram’s suit claims that he is entitled to $95,000, a 14% merit bonus requiring board approval and cash incentive bonuses tied to Definicon’s earnings. The suit also states that Abram is entitled to one year’s salary upon termination.
Abram also alleges that Helionetics failed to provide financial information to Definicon, failed to provide office space for Definicon, failed to repay delinquent loans from Definicon, failed to obtain a $3.5-million line of credit for Definicon, as promised, and failed to support Definicon’s stock-option program.
Helionetics reported second-quarter earnings of $841,000, up from $409,000 a year earlier. Sales for the quarter ended June 30 were $7.7 million, up 38% from $5.6 million the previous year.
Katz said Definicon’s financial results are not available. Definicon employs about 25 to 30 people.
