Launches Counterclaims Against Thought Convergence — Jay Westerdal
Westerdal files counterclaims against Thought Convergence in legal battle.
Name Intelligence founder Jay Westerdal has filed a counterclaim (pdf) against Thought Convergence, Inc. (TCI) in a legal battle over TCI’s buyout of his firm.
In the counterclaim document filed with the California Central District Court, Westerdal claims there were “Myriad of deliberate misrepresentations made by TCI during the negotiation process and execution of the agreement.” Specifically, Westerdal alleges:
-“TCI knowingly misrepresented the stability of its business, its domain parking practices, its reliance on a very modest number of clients for the majority of its revenue stream, its revenue loss free fall, its lack of debt, and its use of the banned industry practice of arbitrage”. Westerdal further claims that arbitrage represented a sizable portion of TCI’s revenues.
-TCI estimated its firm value at $200M, which Westerdal claims was “grossly inflated”. That would have valued the stock payments to Name Intelligence’s owners at $32M, as stated by the documents.
-TCI discussed negotiating an IPO that would include Name Intelligence’s assets.
-There were “significant material adverse changes” to the firm between December 31, 2006 and when the agreement was executed on May 2, 2008, contrary to representations made by TCI.
-There were loans made to TCI prior to execution of agreement, which were not disclosed.
-TCI failed to pay Westerdal his $120k annual salary
Furthermore, Westerdal claims he “performed his obligations of employment to NIL under the Offer Letter, or was excused from doing so since of NIL’s breach of the Offer Letter.”
Thought Convergence and Westerdal have agreed to drop DOTMOVIE from the lawsuit (pdf), as Westerdal states it’s not a business entity and has no employees.
Westerdal and Name Intelligence Inc. (a holding firm owned by Westerdal) also filed a response (pdf) to TCI’s claims, basically deny all of the negative allegations.
