Gloucestershire engineering materials company Versarien has agreed an out-of-court settlement with its former chief executive.
Neill Ricketts left the struggling firm in March last year and launched legal action against the business.
At the time, Versarien said it would "vigorously defend" the "various unquantified claims" made under the Employment Rights Act 1996.
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In May, the Longhope-based company, which makes products using graphene for the automotive, clothing and aerospace sectors, announced that a court hearing had been scheduled for between February 23 and March 6 next year.
In a statement to the stock market on Tuesday (July 22), Versarien said all the claims against the company and its directors made by Mr Ricketts had now been settled, following mutual agreement, for an undisclosed sum.
Versarien added there was no admission of liability by the company or any of its directors.
"This is a full and final settlement of all claims made against the company and its directors by Mr Ricketts," it added.
The announcement follows a difficult few months for Versarien, which is undergoing a major cost-cutting drive amid its financial struggles.
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Earlier in July, the company warned over its future after posting a pre-tax-loss of £1.49m for the first half of the year.
It also confirmed it had closed down its Korean business, although it said it expected "ongoing activity" with the director in the country on a consultancy basis.
Although group revenues rose to £1.47m for the six months to March 31 - up from £1.34m the year previously - revenues from graphene fell to £210,000 from £280,000 the year before.
Last month, Versarien said it was owed nearly £4,000 by a Lancashire housebuilder that had gone into liquidation, adding to its financial troubles.
However, more positive news came two weeks ago when the company confirmed it had extended a partnership deal with a South American manufacturer. The agreement allows the graphene maker's products to be sold in South America, with the Versarien providing technical assistance and training.