July 11, 2003 2:44 PM PDT
DoubleClick, MaxWorldwide in legal spat
In response, New York-based MaxWorldwide notified DoubleClick that it plans to countersue for at least $6.5 million, according to the document, which MaxWorldwide filed with the Securities and Exchange Commission on Wednesday. MaxWorldwide is an online advertising services company.
DoubleClick, also in New York, sold its North American online ad-sales unit to rival L90, now MaxWorldwide, a year ago Thursday. It sold the business for $5 million in cash and 4.8 million shares. DoubleClick was entitled to an additional $6 million if MaxWorldwide was profitable for two consecutive fiscal quarters for the three years that followed the deal.
DoubleClick claimed that MaxWorldwide violated its merger agreement. It aims to sue for "fraud in the inducement and securities fraud, relating to the sale of the online media business," according to the filing.
For its part, MaxWorldwide said the claims were without merit. Among its counterclaims, MaxWorldwide aims to sue for fraud and breach of contract over the buyout deal.
Neither company revealed details about the dispute.
"On July 9, 2003, DoubleClick sent MaxWorldwide a letter which preserves DoubleClick's right to take all appropriate action, including filing a lawsuit, against MaxWordwide for certain breaches under the purchase agreement," a DoubleClick representative wrote in an e-mail, confirming the company's intention to sue.
In March, MaxWorldwide said it would sell its MaxOnline ad-sales division for $6 million to Focus Interactive, owner of MyWay.com and iWon. That transaction has not closed, but the company's legal counsel said it expects the deal to close in the next 30 days.
In the last year, MaxWorldwide has come up against other legal hurdles. In April, the company's former CEO, John Bohlan, and other executives pled guilty to charges of securities fraud.