Computer Associates issued a statement late Tuesday, announcing that the companies had reached an amicable agreement regarding the breach of contract suit filed by Canopy and its subsidiary, Center 7, in U.S. District Court in Utah. Under the agreement, Computer Associates will pay the two companies roughly $40 million.
Canopy and Center 7 had alleged that Computer Associates failed to honor a contract signed in 2000 to market Center 7's management software. Computer Associates, based in Islandia, N.Y., denied the claim.
Technology incubator the Canopy Group is based in Lindon, Utah. A technology incubator is a company--most often run by venture capitalists, nonprofit organizations or universities--that helps provide financial and other support for start-ups. During the dot-com bubble era, many such incubators sprang up to help fund new ideas for online businesses.
Executives at Computer Associates said the payment will affect earnings in the range of 2 cents per share to 3 cents per share and said they expect the settlement to be approved by the courts in the current fiscal quarter.
As part of the agreement between the companies, no other terms of the settlement will be disclosed, according to Computer Associates.