March 21, 2001, 12:25 PM — Struggling speech-recognition software vendor Lernout & Hauspie Speech Products NV (L&H) yesterday announced a proposed settlement of a 5-month-old legal dispute with Visteon Corp., saying it has agreed to sell some of its technology to the automotive supplier for $13.1 million in cash.
The two companies still need approval from the U.S. Bankruptcy Court in Delaware before they can go through with the technology sale, which would resolve a lawsuit that Dearborn, Mich.-based Visteon filed against L&H in October. Visteon, the world's second-largest maker of auto parts and supplies, which had revenue of $19.5 billion last year, claimed that L&H had reneged on a technology joint venture deal.
Visteon and L&H set up the joint venture last April, saying they planned to develop a set of integrated speech and technology products aimed at users in the automotive industry. But Visteon charged in its lawsuit that Belgium-based L&H violated the terms of the deal and wasn't standing by the agreement.
L&H, which is being investigated by the U.S. Securities and Exchange Commission and is operating under bankruptcy protection both here and in Belgium, initially said Visteon's action was "a legalistic and unproductive" move that lacked merit. But yesterday, the software vendor said it had agreed to the proposed technology sale in order to resolve the suit.
If the settlement agreement is approved by the bankruptcy court, L&H would sell its C-REC and SDX technologies to Visteon. The C-REC software was customized for Visteon under a 1997 contract with Dragon Systems Inc., a vendor that L&H acquired last year before its financial problems came to light.