Bridgestone Claims Xybernaut Sold Faulty Computers (Update1)
By David Evans
quote.bloomberg.com
Fairfax, Virginia, Aug. 29 (Bloomberg) -- Xybernaut Corp. was sued in an Indiana court by a unit of Japan's Bridgestone Corp. for selling wearable computers that allegedly proved to be defective.
Xybernaut disclosed the suit on its Internet investor message board. John Moynahan, Xybernaut's chief financial officer, called it a ``politically motivated'' move by a new director of information who wanted to ``rescind his predecessor's actions, including the ordering of Xybernaut's equipment.''
In an unrelated announcement, Xybernaut said its shares will move from Nasdaq's SmallCap to its National Market, beginning tomorrow. The shares rose 1.06 to 8.75 in trading of 2 million shares.
On Dec. 28, Xybernaut announced it sold ``dozens'' of PC's to Bridgestone's Firestone building unit for use in on-site roof inspections. The suit, filed in May in an Indiana state court, was transferred in July to federal court in Indianapolis.
``Xybernaut and Bridgestone made repeated, but unsuccessful attempts to correct the defects'' in the PC's in January, said the suit. Among other problems, the computers didn't work as required with the Windows 98 operating system, according to the suit.
When the problems couldn't be fixed, Bridgestone said it declined Xybernaut's suggestion to try using a different operating system, such as Linux, and then sent Xybernaut written rejection notices in February, March and May before filing suit.
``Windows is a program with a lot of bugs,'' said Moynahan in an interview. ``If you run any computer on Windows, you can always run into issues.''
Xybernaut said the potential negative effect of the legal action was ``immaterial'' since the transaction wasn't included in the $1.4 million revenue reported in the fourth-quarter. The contract was worth about $200,000, Moynahan said. |
