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Cree Co-Founder Files $3 Billion Suit


12:38 PM EST June 13, 2003
The Associated Press


DURHAM, N.C.

Cree Inc. stock fell Friday after the semiconductor company said Eric Hunter, its co-founder and former chief executive, has filed a $3 billion lawsuit against company and his brother, Chairman F. Neal Hunter, alleging securities violations and personal threats.

Durham-based Cree said Eric Hunter alleges that the company and Neal Hunter defamed him by making unspecified false statements about him to members of his family and individuals associated with Cree.

Cree said the allegations are without merit and arise in part from personal and family matters. The company plans to defend the case.

The complaint, which also named Eric Hunter's wife, Jocelyn, as a plaintiff, was filed in U.S. District Court in Greensboro.

Eric Hunter's lawyers said the suit claims that beginning in 1995 Cree and Neal Hunter filed false and misleading statements related to public stock offerings, omitted material facts from earnings statements and misled auditors over income paid to officers and directors.

The suit also claims Neal Hunter a side agreement with a company controlled by another brother, Jeff Hunter, to accept to unlimited shipments of silicon carbide crystals in an effort to artificially increase Cree's earnings.

Eric Hunter's suit further alleges that Cree's chairman and other officials made personal threats in an effort to stop them from reporting the alleged violations to the Securities and Exchange Commission.

Neal Hunter replaced Eric Hunter as president and chief executive in August 1994.

Cree said Eric Hunter is a current part-time employee. A company representative couldn't be reached for further information on his status with the company.

Among Cree's products are blue and green light-emitting diodes, or LEDS, used in a variety of electronics. It also makes chips for wireless communication and other applications. It had $204 million in revenue in the 12 months ended in March.

Cree shares traded at $17.70, down $4.41, or 20 percent, midday Friday on the Nasdaq Stock Market.

 
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