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ATS MEDICAL ANNOUNCES RECEIPT OF $510,000 IN STOCK IN SETTLEMENT OF LITIGATION WITH FORMER OFFICERS

 MINNEAPOLIS, Nov. 8 /PRNewswire/ -- Manny Villafana, chairman and chief executive officer of ATS Medical, Inc. (NASDAQ-NMS: ATSI), today announced that ATS Medical has successfully settled the litigation commenced by three former officers of the company. The former officers agreed to pay $510,000 of ATS Medical stock to the company in exchange for the company dismissing its counterclaims against the former officers. The former officers will not receive anything in exchange for dismissing all of their original claims against Villafana and ATS Medical.
 "This settlement compensates the company and its shareholders for a lawsuit that never should have been brought," commented Villafana. "Once they commenced litigation, we examined the entire situation and decided, on behalf of our shareholders, to pursue our legitimate counterclaims. We were willing to settle this litigation only upon receiving stock with a value more than covering our expenses," added Villafana.
 The three former officers (John Holroyd, John Salstrom and Miguel Villarejos) commenced the litigation against ATS Medical and Villafana in April of 1992. Their claims asked for additional ATS Medical stock and severance payments in connection with the officers' termination of employment resulting from the company's suspension of its biotechnology business in early 1991. The former officers had already received in excess of $5 million of ATS Medical stock. The company and Villafana denied all of the claims, and the company brought counterclaims against Holroyd and Salstrom alleging fraud in their acquisition of ATS Medical stock and against Villarejos alleging breach of his confidentiality agreement in connection with the sale of the company's biotechnology assets to Villarejos new employer.
 In October of 1993, the court dismissed nine of the former officers' 10 causes of action against Villafana and the company. In its opinion dismissing the former officers' claims, the court stated that "the record of the parties' transactions reflects that plaintiffs received all benefits for which they negotiated and to which they were entitled under the written agreements." While dismissing the former officers' claims, the court refused to dismiss either of the company's counterclaims. "The court's decision justified our position that these employees were treated fairly and given every benefit that they were promised, while our counterclaims presented questions to be decided by the jury," stated Howard Root, ATS Medical's general counsel. "Rather than proceed with the cost and distractions of a full trial, we decided it was in the best interests of the company to settle at this time for a profit," added Root.
 The company expects to receive the stock and record the settlement as a gain in the fourth quarter ending Dec. 31.
 ATS Medical, Inc. manufactures and markets a new pyrolytic carbon bileaflet mechanical heart valve. The company's common stock is traded on the NASDAQ-National Market System under the symbol "ATSI."
 -0- 11/8/93
 /CONTACT: Manny Villafana, chairman and CEO, or Howard Root, general counsel, of ATS Medical, 612-553-7736/
 (ATSI)


CO: ATS Medical, Inc. ST: Minnesota IN: MTC SU:

CP-AL -- MN012 -- 1823 11/08/93 13:40 EST
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Publication:PR Newswire
Date:Nov 8, 1993
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