Value of claim against Baltimore may hit €20m

The London-listed company that is seeking a repayment and damages from Baltimore Technologies plc for breach of contract said yesterday that the full value of its claim was £13.5 million (€20 million), around three times the figure quoted in reports earlier this week.

On Monday, shareholders voted to remove the Baltimore board, chaired by long-time chief executive Mr Bhijan Khezri, and replace it with an alternative proposed by the company's biggest stakeholder, Acquisitor, which has over 20 per cent of the company. Mr Duncan Soukup is now chief executive and Mr David Buchler is chairman.

It emerged last weekend that Earthport, an electronics payment specialist listed on London's Alternative Investment Market (AIM), was demanding the return of £4.5 million it paid Baltimore under contracts in 2001. The company has not begun court proceedings at this stage.

In a statement to the markets yesterday, Earthport confirmed that it had written to Baltimore seeking the return of the cash and damages for breach of contract and misrepresentation.

"Earthport is currently engaged in assessing these damages, but on Baltimore's own reckoning, made at the time of the agreements that it would derive in excess of £9 million over a three-year period from its profit share element, Earthport assesses these damages to be in excess of that figure," it said.

"Therefore the extent of the claim by Earthport against Baltimore is anticipated to be in excess of £13.5 million."

The statement added that the combined damages and costs exceeded Baltimore's €24 million-plus cash reserves, which Mr Khezri and his board had proposed distributing to shareholders. Earthport said that it expected "adequate provision" to be made in this regard.

Mr Buchler responded last night with a statement saying that Baltimore was first made aware of the Earthport claim last April (during the tenure of the previous board), but there was not a public announcement until the day of the company's extraordinary general meeting last Monday. "It was only on this date that the new board of Baltimore were made aware of this claim," he said. "The new board's legal advisers are carrying out an investigation."

Mr Buchler added that it was recognised that the Earthport statement was that of a "potential litigant".