Cohen sues Kit in the US over Hyro sale

Gary Cohen, head of the company formerly known as Hyro, is suing the Kit Digital for AU$15.2 million plus damages for breaching the contract of sale for Hyro's digital business.
Written by Spandas Lui, Contributor

Just a day after US-based tech firm Kit Digital's local arm went into administration, technology magnate Gary Cohen is suing the company in the US, claiming that Kit misrepresented its financial position when it bought Hyro's digital technology business last year.

Cohen, who headed up iSoft before the company was acquired by CSC, took over as the chairman of Hyro in mid-2012, just after Hyro's digital division was sold to Kit. Hyro has since been renamed Invigor Group (ASX: IVO).

Kit Digital's local arm, along with Hyro Digital, went into administration this week. Invigor Group has accused Kit of breaching the terms of the acquisition deal.

"Kit has previously announced its accounts were not accurate at the time it entered into the share purchase agreement (SPA) and that it is replacing its auditor," Cohen's company said in an Australian Securities Exchange (ASX) statement (PDF). "Invigor is of the opinion [that] Kit's actions represent a breach of the terms of the SPA."

The company launched legal proceedings in the US last week, suing Kit for AU$15.2 million for breach of contract, along with damages.

Invigor told the ASX that it had been preparing to sell its shares in Kit, acquired through the Hyro sale, to pay off its debts.

Kit was previously de-listed from the NASDAQ stock exchange for failing to pay its listing fees.

Cohen was unavailable for comment at the time of publication.

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