SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
July 2, 1996 June 26, 1996
Date of Report) (Date of earliest event reported)
KMS INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-2917 38-1842108
(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
101 North Main, Suite 410
Ann Arbor, Michigan 48104
(Address of Principal Executive Offices)
Registrant's telephone number, including area code:
(313) 769-1100
Not applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On June 26, 1996, the United States Court of Federal
Claims (the "Court") issued its decision that KMS Fusion,
Inc., a wholly-owned subsidiary of KMS Industries, Inc. (the
"Company") had failed to prove that the United States
Department of Energy ("DOE") breached the contract
between the parties when, at the end of 1991, DOE refused
to extend the subject contract to cover the completion of
close-out work at the KMS facility in Ann Arbor, Michigan.
Accordingly, the Court entered judgment against the
Company and dismissed the Company's complaint. The
Company had commenced litigation on this claim on
September 9, 1994 seeking $15,400,000 plus interest from
February 18, 1992 plus legal fees pursuant to the Equal
Access to Justice Act. In August, 1995, DOE obtained a
partial summary judgment in its favor with respect to the
Company's claims for lost profits pursuant to which the
Court reduced the amount of the claim to approximately
$6,900,000. The Company reported the Court's decision in
a Press Release, dated June 28, 1996, which is included in
Item 7(c) and is incorporated herein by reference. The
Company will review all of its options, including appeal.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
Exhibit No. Description
99 Press Release, dated June 28, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
KMS INDUSTRIES, INC.
By: /S/ Patrick B. Long
--------------------------------
Patrick B. Long, Chairman of the
Board and Chief Executive Officer
Date: July 2, 1996
Exhibit 99
NEWS RELEASE FOR IMMEDIATE RELEASE
KMS INDUSTRIES, INC. CONTACT: Terence C. Liddy
P.O. Box 1778 (313) 769-8500
Ann Arbor, MI 48106-1778
June 28, 1996
KMS ANNOUNCES THAT UNITED STATES COURT OF
FEDERAL CLAIMS HAS DENIED ITS CLAIM AGAINST THE
UNITED STATES DEPARTMENT OF ENERGY FOR
BREACH OF CONTRACT
In a decision handed down this week, the United States
Court of Federal Claims held that KMS failed to prove that
the United States Department of Energy (DOE) breached
the contract between the parties when, at the end of 1991,
DOE refused to extend the subject contract to cover the
completion of close-out work at the KMS facility in Ann
Arbor, Michigan. Accordingly, the Court entered judgment
against KMS and dismissed the Company's complaint.
Mr. Patrick B. Long, Chairman and CEO of KMS expressed
his disappointment in the Court's decision and stated that
the Company would review all of its options, including
appeal.
A second lawsuit, seeking to recover Three Million One
Hundred Sixty Nine Thousand Dollars of unreimbursed
indirect costs from DOE for the calendar years 1987 through
1991, has been filed by KMS and is pending before the
same Judge. DOE has also filed a claim against KMS in
connection with the subject matter of this second lawsuit in
the amount of Five Million Eight Hundred Thousand Dollars.
KMS believes the DOE claim is without merit.
Per the terms of a 1993 partial settlement agreement
between the parties, DOE has the right to make a Two
Million Dollar set-off against any awards that might be
granted by the Court in connection with the subject contract.
Accordingly, any recovery by KMS against DOE in either or
both of the two lawsuits, would be subject to this set-off.
For further information, please contact Mr. Terence C. Liddy,
President.
