Luminus settles lawsuit, stays open

By Todd Wallack, Globe Staff

Luminus Devices, the Billerica lighting company that warned it could go dark after a dispute with its lender, said it has worked out a deal to keep the lights on.

The company, which makes light-emiting diodes, or LEDs, said it was forced to lay off most of its staff after its lender, Hercules Technology Growth Capital Inc., seized some of its bank accounts last month.

But Luminus Chief Executive Keith T.S. Ward said Hercules agreed to release the company's bank accounts after both parties agreed to renegotiate the terms of the $15.1 million loan, including reducing the amount Luminus borrowed. In addition, Ward said Luminus was able to line up some bridge funding from its board of directors and existing investors to help fund the company until it can finish raising $15 million from investors later this month, allowing Luminus to recall most of its staff.

"We settled this through some difficult, late negotiations,'' Ward said. "We are effectively moving forward."

Still, Luminus, which had 130 employees at its Billerica headquarters and a factory in Woburn, said it decided to eliminate 30 jobs, primarily in manufacturing, to become more efficient. "We had to make sure we were properly sized for our current demand," Ward said.

Luminus supplies LEDs to many major electronics manufacturers, including Samsung, LG Electronics, and Philips Lighting, to make lighting products used everywhere from U2 rock concerts to digital signs and projection systems. The company has raised $140 million since its founding in 2002.

Hercules, which is based in Palo Alto, Calif. and provides financing to technology and life sciences companies, could not be reached for comment.

Luminus initially filed suit against Hercules in late December, claiming that Hercules seized its bank accounts after improperly declaring Luminus to be in default on its loan.Hercules claimed it had no choice, because Luminus estimated it would have higher losses than initially thought this year, raising serious doubts about the company's ability to repay its loan. As part of the settlement with Hercules, Luminus has agreed to withdraw the suit.

In an interview today, Ward also said he'd prefer to focus on the future, which he termed bright. Ward said the company expects its sales, which totaled nearly $10 million last year, to double this year.

"We had our best month ever in December,'' he said. "We have had so many positive things happen."