Judge Approves Sale of Hytera’s U.S. Entities' Assets to New Hytera Entity
Tuesday, December 29, 2020 | Comments

A California bankruptcy judge approved the sale of the assets of Hytera Communications’ U.S. subsidiaries to a newly formed Hytera entity. However, the approved sale does not include some assets involved in litigation with Motorola Solutions. A separate hearing on those issues will be held in January.

Hytera’s two U.S. subsidiaries filed for Chapter 11 bankruptcy in May, largely in part because of litigation brought against them and Hytera Communications by Motorola Solutions. In 2017, Motorola sued Hytera and it subsidiaries in the U.S. District Court for Northern District of Illinois, alleging that Hytera had stolen its trade secrets. In February, a jury awarded Motorola $764.6 million in damages.

Those damages make up the majority of outstanding debts Hytera’s American entities cited when filing for bankruptcy. After searching for other buyers, Hytera asked the court to approve a sale of the subsidiaries’ assets to Hytera US, a newly formed Hytera entity. The court held a hearing and was ready to approve the sale but Motorola filed a motion objecting to the sale.

Motorola accused Hytera of using the bankruptcy to put a stay on post-trial proceedings in the theft of trade secrets case. Under federal law, when a bankruptcy case is initiated, other legal proceedings against that entity are stayed. Motorola argued that Hytera was using the bankruptcy to prevent a Motorola motion asking for a permanent injunction that would prevent Hytera from selling products determined to include Motorola trade secrets from moving forward.

Hytera and Motorola agreed to a lifting of the stay to allow that motion to be considered before a hearing on the sale was held. The Illinois court has since denied Motorola’s injunction but granted Motorola a reasonable royalty for Hytera’s continued use of its trade secrets.

The U.S. Bankruptcy Court for the Central District of California granted Hytera’s request to approve the sale of the two U.S. subsidiaries to Hytera US. The court determined that the proposed sale would bring the highest value for the U.S. subsidiaries assets and would pay off more of the companies’ debts than any other alternative.

However, the assets approved for sale by the judge do not include an inventory of products determined to use Motorola trade secrets that Motorola has contended should not be sold to the new Hytera entity. The court will hold a hearing on that specific issue on January 22.

Prior to that hearing, Motorola and the subsidiaries are to meet by January 5 to try and come up with a resolution for that particular issue. Additionally, Motorola has until January 7 to file a motion identifying inventory held by Hytera that include its trade secrets. Hytera then has until January 14 to respond to that filing.

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On 1/6/21, Nate Kirschman said:
Danny legislation or litigation I hope our legislative bodies are not writing and passing legislation against any company. That s downright frightening.

This whole thing continues to be Motorola s bully tactics. I sure enjoyed beating them on some deals and now in retirement and reading about this stuff I remember why every win against them felt so good. Editor's Note: Nate thanks for catching my typo. It is indeed litigation and not legislation. The story has been corrected. -Danny


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