DALLAS, TX -- Elcoteq may no longer exist, but legal wrangling over its assets continues.  

Late last month, US court determined a suit against Philips Lighting Electronics involving allegations of unauthorized transfers of property of the former Elcoteq's property can go forward.

The decision seemingly negates a successful suit brought by a group of former Elcoteq workers in Juarez, Mexico, where the EMS company ran a manufacturing site. Elcoteq had acquired the site from Philips Lighting Electronics and owned all the assets and inventory.

Following Elcoteq's bankruptcy filing, workers at the site filed suit over unpaid wages and severance.  With an initial finding in its favor, the workers took their former employer's assets and sold them for $2.2 million to Philips, which in turn sold the assets to a third party for $1.2 million.

The factory was located in a US-Mexico free-trade zone, and the trustee overseeing the disposition of Elcoteq's assets filed suit in US court to prevent the sale or transfer of the bankrupt company's assets as a result of the workers' suit. For its part, Philips attempted to use a jurisdictional clause in international law to prevent the trustee from holding up the sale. It asked the judge to dismiss the case.

On Oct. 31, the US Court found in favor of the trustee, saying Elcoteq was not provided an opportunity to fight the foreclosure and disposition of its assets, and to do otherwise would shield Philips from allegations of improper transactions regarding the former Elcoteq’s property. As such, the US trustee for Elcoteq's property can continue to seek to reclaim those assets via the judicial system.