Boston Communications Group Inc. placed $41 million into escrow to be used as bond if a $128 million judgment against it is upheld, the company said late Wednesday.
Cingular Wireless L.L.C. also agreed to post bond for any amount in excess of the $41 million for which it may be held jointly liable, BCGI said. The carrier also agreed to drop a lawsuit that would have forced BCGI to indemnify Cingular.
BCGI said the move will allow it to proceed with its appeal against Freedom Wireless Inc. and could stave off bankruptcy if the original ruling is upheld. Freedom was awarded $128 million in May after a jury found BCGI violated a Freedom patent covering the technology and processes used to provide prepaid cellular service.
Freedom and BCGI recently concluded arguments in a trial that saw BCGI fight the original ruling with an unenforceability defense, claiming Freedom knowingly withheld some information. A ruling is expected after Aug. 15, and BCGI said it may file motions for a new trial and to reduce the damages.
The company reported a second-quarter loss of $17.9 million, or $1.01 per share, thanks largely to a $24 million non-cash charge to account for the Freedom verdict. The loss was the largest quarterly deficit for the company in a decade.
Without the charge, BCGI would have reported a net income of $751,000, or 4 cents per share.
Investors were lukewarm on the company’s results, which were released after Wednesday’s closing bell. BCGI shares were down 4 cents, to $2.05, in mid-morning trading on the Nasdaq Thursday.
