Softbank Interactive Founders Sue Former Parent Company
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Perhaps not unexpectedly, the founders of Softbank Interactive Marketing have reportedly filed a $200 million lawsuit against SIM's former parent company, Softbank Holdings and its subsidiary, Ziff-Davis.
The suit follows the sale of the Internet advertising unit to the strangely named ZULU-tek, formerly echoMEDIA. The new owners renamed SIM as ZuluMedia.
Also named in the suit, according to Advertising Age, are Ziff Chairman and CEO Eric Hippeau and Jeffrey Ballowe, president of marketing and development of Ziff-Davis' Interactive Media divisions, as well Masayoshi Son, president and majority shareholder of Softbank Corp. in Japan, parent of Softbank Holdings.
The lawsuit, filed April 17 in the Supreme Court of New York, alleges that the defendants abused their control of SIM by mismanaging the company's business. The lawsuit also claims that "to make matters worse, Softbank sold its stock to a company whose inappropriateness as a purchaser was obvious for all to see." On Dec. 31, Softbank Holdings sold a majority of SIM to ZULU-tek.
Plaintiffs in the suit include Andrew Batkin, former chairman and CEO of SIM; Lawrence Howorth, former president and chief financial officer; Edward West, former chief operating officer of SIM's media sales group; and Robert Colvin, former president of SIM's media sales group.
Laurie Butler, an attorney with Tourtelot & Butler who represents Softbank Interactive, or ZuluMedia, and Zulu-Tek, said she had not seen a copy of the suit. But she was quoted by Wired as saying that her clients "don't feel that they've done anything wrong in buying Softbank Interactive and are just interested in running a business."