Bug killing germ warrior Zoono (ASX:ZNO) is set to drop a court case against a hand sanitiser business after the business was placed into liquidation.

Zoono, which makes anti-microbial sprays designed to kill germs and treat acne, launched a joint venture called Stayzon Retail Ventures in May 2017.

Under the agreement, Zoono would sell the Stayzon product range, which included a “revolutionary” alcohol-free, 24-hour protection hand sanitiser.

But Zoono told the market this morning that Stayzon had been placed into voluntary liquidation by its directors, and as such, it was likely to cease legal proceedings that began in December last year.

Stayzon Retail Ventures ownership was split down the middle between Zoono and MCS Capital Partners, the sister company of Permagard, Zoono’s Australian distributor.

In July 2017 Zoono announced that Stayzon products would be sold in Woolworths supermarkets across the country, news that saw the share price climb from 17c to to highs of 21c.

But it had turned sour by March 2018, with the two parties mutually deciding to walk away from the agreement after sales for the second half of 2017 failed to breach $50,000.

By December 2018 it had moved from sour to acrimonious; Zoono sued MCS Capital and Stayzon Retail Ventures, accusing Stayzon of “engaging in, and continuing to engage in, making false and misleading statements in the marketing and sale of Stayzon products”.

Stayzon filed a counter claim last month, seeking $790,000 plus repayment of any benefits Zoono received, but Zoono replied that it believed the claim was “totally without merit” and that it would “vigorously pursue” its claim.

Now Zoono says it is unlikely to continue hounding the courts for justice.

“As Zoono’s primary purpose in bringing the proceedings was to force Stayzon to stop engaging in conduct which it believed to be misleading and deceptive in the context of Zoono’s products and trade claims, it is unlikely Zoono will further pursue its claims for damages in light of Stayzon’s liquidation,” the company said in a statement.

“Zoono will seek discussions with the liquidator before determining its course of action in respect of the proceedings.”

The company said aside from costs to date it did not expect the liquidation to have any financial impact on Zoono.

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