Blue Ocean Can Buy Beam Telepresence Tech Despite Price Concern

Blue Ocean Robotics can proceed with its $400,000 acquisition of Suitable Technologies Inc.'s Beam teleconference technology after a Delaware judge rejected an attempt by the estranged wife of Suitable’s CEO to halt the deal.

Delaware Chancery Court Vice Chancellor J. Travis Laster said granting an injunction could jeopardize Blue Ocean’s contract rights. There’s no probability of irreparable harm and any damage from the deal could be awarded later, he said. The couple’s divorce proceedings also complicate the case, he said.

“They are probably playing three-dimensional chess and I am not aware of all the pressure points between them,” Laster said at a hearing Dec. 13. “It seems to me that an injunction would potentially change the leverage in ways that I am not sure I fully understand.”

Allison Huynh, the estranged wife of Suitable CEO Scott Hassan, sued Nov. 5 on behalf of the company and other stockholders in the Chancery Court, saying the deal fetched an “unfair price based on a sham sale process” designed to line Hassan’s his own pockets.

Hassan struck the deal even though the company’s Beam business is worth as much as $60 million, she said.

Laster said Huynh had shown evidence that the sale process and price may not be in the best interests of the company. Tax losses seem to be driving the deal’s valuation, he said.

“I think there’s good reason to think this deal was not entirely fair,” Laster said. “Generally speaking, the sale process is not one that inspires confidence. It’s one that inspires concern.”

Huynh, who co-owns 600,000 shares of Suitable common stock with her husband, also sued Blue Ocean Robotics Holdings ApS, Beam Robots ApS, and Beam Robots US Inc. for aiding and abetting. She said they helped Hassan, who is Suitable’s sole director, board chairman, and controlling stockholder, to craft the deal. Hassan owns more than half the company’s stock.

Blue Ocean, a robotics technology developer in Denmark, said in August it had signed an agreement with Suitable to acquire Beam. The videoconferencing “telepresence” robot became famous in 2015 when disability advocate Alice Wong used it to remotely participate in a reception with President Obama at the White House.

“The price is ridiculous on its face,” Huynh’s attorney, Pierce O’Donnell of Greenberg Glusker Fields Claman & Machtinger LLP, told the court Dec. 13. Hassan’s motive to sell at the low price was to get a $34 million tax write-off, O’Donnell said.

Suitable holds a $29.6 million patent portfolio, brand value worth $13.7 million, and $13.1 million worth of tangible assets such as inventory and manufacturing equipment, Huynh said. The income stream from patents alone is $700 million, she said.

Hassan’s attorney, David J. Teklits of Morris, Nichols, Arsht & Tunnell LLP, argued that Suitable is an insolvent company with annual losses of $10 million. Hassan had poured more than $90 million into the company over the years, Teklits said.

“At some point he’s going to claim a loss, but the fact that he can reduce capital gains taxes is simply a function of the fact that the company failed,” Teklits told the court.

The couple married in 2001 and filed for divorce in 2015. Huynh has also sued in the Superior Court of California in Santa Clara County, a family court, to stop the deal. A hearing in that case has been scheduled for Dec. 19.

The case is Huynh v. Hassan, Del. Ch., No. 2019-0893, Hearing on preliminary injunction 12/13/19