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7/8/2009
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Former IBM Exec Seeks Fraud Dismissal

Unisys' Sam Khanna has asked a court to toss suit filed by Big Blue.

A former IBM executive who jumped ship to rival Unisys has asked a court to dismiss IBM's fraud suit against him.

Sam Khanna, Unisys' GM for North American IT services, says IBM's claim suffers from "the absence of a material false representation," according to court papers Khanna filed last week.

"The complaint does not state a cognizable claim for fraudulent misrepresentation," Khanna states.

IBM filed fraud and breach-of-contract charges against Khanna in May, alleging that he improperly cashed in hundreds of thousands of dollars in stock options and other benefits before leaving to join Unisys. In November, IBM filed a breach-of-contract claim against Mark Papermaster, now head of Device Hardware Engineering at Apple.

IBM contends that Khanna violated an agreement to repay benefits if he moved to a competing company within twelve months of exercising those benefits, IBM claims in court documents filed in U.S. District Court for Southern New York.

Khanna held a number of high-level posts at IBM from 1996 until May of 2008, when he joined Unisys. IBM is suing him for more than $500,000. It's asking the court to order Khanna to repay the benefits and also pay punitive damages and legal costs.

Microchip expert Papermaster in January settled a noncompete lawsuit filed against him by IBM and in April joined Apple.

Meanwhile, IBM is continuing to press a breach of contract suit against David Johnson. Johnson was Big Blue's head of mergers and acquisitions before leaving to join Dell last month. IBM claims Johnson violated a non-compete clause in his contract.

The case is ongoing.

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