Levine Leichtman settles with technology outsourcer

Butler International will pay the LA firm nearly $1.3m for breach of contract following the collapse of a proposed financing.

Levine Leichtman Capital Partners III, the third fund of Beverly Hills, California-based private equity firm Levine Leichtman Capital Partners, will receive approximately $1.27 million (€976,000) from Butler International, a Montvale, New Jersey-based provider of technology outsourcing, as part of a settlement agreement, Butler said in a statement.

The agreement also includes an end to an agreement by which Levine Leichtman was to acquire more than one million shares of Butler’s common stock.

The settlement concludes the lawsuit Levine Leichtman brought against Butler on October 12 alleging “breach of contract and negligent misrepresentation”, Levine Leichtman said in a November statement. The firm originally sought payment in excess of $1.3 million.

Butler had announced the deal with Levine Leichtman in June. The terms of the agreement were to include up to $35 million balance of a loan to be completed when Butler had finished filing “restated and delinquent SEC filings”, Butler said in a statement at the time. The purpose of the investment was to help Butler in its second phase of refinancing.

Founded over 60 years ago and traded on the Pink Sheets, Butler provides clients with onsite, offsite or offshore service delivery options, the statement said. Its clients include those in the aircraft, aerospace, defense, telecommunications, financial services, heavy equipment and manufacturing industries.

Levine Leichtman, founded in 1984 by Arthur Levine and Lauren Leichtman, manages more than $1.5 billion of institutional investment capital and focuses on companies that have annual revenues of between $50 and $500 million. The firm had made plans early to buy Fox & Hound Restaurant Group, a chain of “English-style” pubs for $14 per share in October of 2005 but backed out of the deal. Hedge funds Newcastle Partners and Steel Partners agreed to acquire the company in February.