Stevens’ Defense: Allen Gets $40M for Cooperation

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September 23, 2008 5:43 pm
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Attorneys for Sen. Ted Stevens are doing their best to discredit Bill Allen, the former VECO CEO and key witness in the government’s prosecution.

In documents filed yesterday, the defense claimed that Allen would receive a windfall of $40 million in return for his cooperation with the investigation.

“Defense counsel have recently learned that Mr. Allen stands to gain an additional $40 million of a total of $70 million in ‘hold back’ cash from the sale of Veco to CH2M Hill if he continues to cooperate with the government and if Veco continues to avert indictment,” court documents filed Monday said.

But CH2M, the company that acquired the VECO from Allen, rebutted Stevens’ attorneys’ claims stating that the defense “misconstrues the terms” of CH2M’s agreement with Allen.

From court documents filed today:

The principal purpose of the holdback, which is a common provision in the context of typical acquisition transactions, is to cover CH2M HILL for undisclosed liabilities, such as those relating to tax, environmental, and human resources.

Use of the holdback in connection with a breach of Mr. Allen’s cooperation agreement or an indictment of VECO is available only upon a showing of damages, and then only in the amount of the damages resulting from the event.

The Allen family’s right to the holdback funds is not conditioned, as the defense suggests, on Bill Allen’s cooperation or VECO not being indicted.

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