EMC lawsuit ousts storage rival's CEO

SANgate Systems is without a CEO after a judge issues a preliminary injunction that the executive's employment violated the terms of a contract with EMC.

Stephen Shankland
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The CEO of storage hardware maker SANgate Systems resigned Tuesday, after a judge issued a preliminary injunction that the executive's employment violated the terms of a contract with his previous employer, storage rival EMC.

EMC filed the suit in October against Doron Kempel, then SANgate's CEO and formerly the general manager of EMC's media solutions group, saying he violated the terms of a contract that said he wouldn't compete against EMC.

SANgate argued that it didn't compete against EMC, but a judge found otherwise.

"EMC obtained a preliminary injunction...removing Doron Kempel as CEO and chairman," said Beth Winkowski, a spokeswoman for SANgate. "We were very surprised. As we did not anticipate this, we do not have a replacement to announce yet."

Though the injunction permits Kempel to be rehired in nine months, SANgate will look for a different CEO, she said.

"We've elected not to pursue an appeal. The appeal process would take too long," Winkowski said. "No company can wait nine months."

EMC, based in Hopkinton, Mass., sells high-end storage systems and accompanying software for high-speed transactions with several servers simultaneously. The company, which profited mightily from the Internet boom, is struggling amid the economic downturn.

SANgate, with 77 employees and headquarters in Southborough, Mass., is working on hardware that can link different companies' storage systems to each other and to Unix, Windows and mainframe servers. Both companies offer software features for copying data and mirroring it on more than one storage system.