Mercedes Walton Wins Arbitration Claim Against Cryo-Cell International, Inc.
On June 14, former chairman and CEO of Cryo-Cell International Inc., Mercedes Walton, as granted a $1.1 million award in the arbitration of a case against her former employer involving defamation of character and breach of employment contract. Walton filed a claim for arbitration with the American Arbitration Association and originally sought $5 million in compensation. The $1.1 million award she received, however, included $981,000 in lost wages and $100,000 as compensation for defamation—an amount that will be covered by Cryo-Cell International Inc.’s insurance.
As a private cord blood bank located in Oldsmar, Florida, Cryo-Cell International Inc. will be in the red this quarter due to the payment to Ms. Walton in addition to a write-off involving abandoned patents. The legal fees associated with the arbitration claim reached approximately $219,000 for the company, contributing to its reported net loss in shares over the last three months. However, this loss is slight compared to losses suffered by the company last year around this same time.
In fact, despite the loss, the company is projecting a positive outlook for the rest of the year. In a press release, David Portnoy, Chairman and Co-CEO of Cryo-Cell stated, "Key metrics of performance, such as the 10% increase in revenues, during the second quarter of fiscal 2013 as compared to the second quarter of fiscal 2012 are encouraging. We are pleased to see the continued improvement in our business results. The earnings from business operations in the first half of the year demonstrate that our new sales and marketing initiatives have gained traction."