SIEMENS LOSES ARCO LAWSUIT.

Byline: Dave McNary Daily News Staff Writer

A New York judge has thrown out a $150 million suit accusing Atlantic Richfield Co. of fraud in the 1990 sale of its Camarillo-based solar energy business to Siemens AG.

The German electronics giant claimed Arco had concealed problems about key technologies prior to the $36 million sale. But state Supreme Court Judge Herman Cahn, in a ruling issued late Monday, found Siemens was aware of the difficulties before it closed the deal.

``The record demonstrates that after comprehensive due diligence and lengthy arms-length negotiations, Siemens elected to buy what it knew were three unproven, money-losing technologies at a fire-sale price,'' Cahn said.

A Siemens spokesman said Tuesday that the company will appeal the ruling, noting, ``We have reviewed Judge Cahn's opinion and believe it was wrongly decided.''

The Camarillo manufacturing plant, with 300 employees, is one of the world's leading suppliers of silicon-based solar cells and modules using photovoltaic technology to convert sunlight to electricity. Siemens is halfway through a 12-month capacity expansion program that will boost the facility's annual capacity by 50 percent.

Arco bought the Camarillo plant in 1977 and put it up for sale in 1989 as part of a corporatewide restructuring. The Los Angeles-based energy-products concern had been unable to turn a profit from the operation after investing more than $200 million.

Siemens filed the suit in 1993, contending it had been forced to pay more for Arco Solar than it was worth because Arco allegedly failed to disclose that the thin-film cell technology under development was not ``commercially viable.'' Siemens also argued that Arco's deception required Siemens to spend more than it had anticipated.

Siemens backed up its contentions with internal computer messages sent by Arco Solar executives prior to the sale. One called the technology a ``pipe dream, let Siemens have the pipe''; another said it would have to ``go back to the drawing boards'' to solve the problems; still another said, ``We will attempt to finesse past Siemens the fact that we have had a great deal of trouble in successfully transitioning technology from the laboratory to the factory.''

But Cahn noted all of the e-mails were written after negotiations for the sale had been completed. ``As such, they do not evidence a plan of misrepresentation to induce the acquisition,'' the judge wrote. ``Rather they reflect a discussion over the best way to influence the new corporate owner to adopt the technological strategy apparently favored by Arco Solar's management.''

For several years prior to the sale, Arco and Siemens had worked on a joint venture to develop the thin-film technology. The judge noted in his decision that Siemens was aware at the time of the sale that there were ``substantial'' problems with taking the technology to ``commercial viability.''

Siemens abandoned attempts to develop silicon-based thin-film technology at the Camarillo site several years ago and currently is working on another version involving copper indium diselenide, according to a spokesman.