PSC ends supply dispute with rival.

Byline: Sherri Buri McDonald The Register-Guard

PSC Inc., a Portland-based laser scanner maker with 580 employees in Eugene, took a step closer on Tuesday toward emerging from bankruptcy reorganization and going private.

PSC and rival Symbol Technologies Inc. of Holtsville, N.Y., have settled a long-standing legal dispute related to supply agreements under a previous out-of-court settlement.

The lawsuit, which Symbol filed against PSC in June, needed to be cleared up before PSC could emerge from Chapter 11 bankruptcy as a private company. PSC said it expects to do that in June. PSC currently has publicly traded stock.

"It's certainly important for them to put (the lawsuit) behind them," said Rick Morgan, editor of Scan: The Data Capture Report, a trade publication in Erie, Pa. "They had to finish that up before they could come out of Chapter 11."

Under the agreement announced Tuesday, PSC will pay Symbol $6 million and Symbol agrees to sell scanner components to PSC until 2007. The companies also agree to drop all claims against each other and to terminate all existing supply agreements for scanners.

To take effect, the settlement must be approved by the U.S. Bankruptcy Court in Manhattan, N.Y., where PSC filed in November for bankruptcy reorganization.

Debt-burdened PSC filed for Chapter 11 as part of its deal to be acquired by Littlejohn & Co. LLC, a Connecticut-based private investment firm.

Littlejohn, which specializes in reviving troubled midsize companies, bought PSC for an undisclosed sum and pledged to provide it with a $20 million line of credit. PSC will use some of that cash to cover the $6 million payment to Symbol, said Edward Borey, president and CEO of PSC.

Executives at Symbol and PSC said they were happy to settle the legal conflict.

"This resolution normalizes our relationship with Symbol Technologies," Borey said. "Now we can focus on customers and the marketplace."