Legendary technology incubator Idealab! Friday found itself the target of shareholder rage.

The Pasadena, Calif.-based company, which has launched the dot-com careers of sites like PETsMART.com, Tickets.com, New.net and .TV, is facing a amended lawsuit from that seeks more than $1 billion in damages.

The case stems from a January 18 court filing, where a small number of Idealab's investors filed a lawsuit against the company and certain of its executives.

The company says the allegations are baseless and has yet to even be served the papers, which would get the legal ball rolling. Lead attorney for the shareholders Skip Miller says the company was served all documents Thursday.

The suit, which alleges abuse of authority and diversion of corporate assets to the harm and detriment of minority shareholders and improper distribution of corporate assets, also seeks the dissolution and liquidation of the company and removal of all directors.

Besides Idealab, the lawsuit names as defendants its Chairman and CEO Bill Gross; his fiancee Marcia Goodstein whom he appointed as Idealab's President and COO; CFO Bradley Ramberg; other Idealab officers and directors Robert Kavner, Howard Morgan, Benjamin M. Rosen and Lawrence Gross (Bill Gross' brother); as well as Douglas McPherson.

The lawsuit also says that on a single day, March 15, 2000, soon after the shareholders, the defendants, invested $1 billion the company:

* Spent more than $600 million in cash and gave away more than $250 million in Idealab preferred stock, investing in 26 speculative companies, including some in which the defendants personally owned stock.
* Went on a personal spending spree with corporate money in which they ratified personal loans to eight Idealab directors and officers totaling $35.7 million and granted themselves and others $46 million worth of stock options for $40 million.

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The suit also complains that bonuses and raises issued to Gross, Goodstein, Morgan, and Ramberg hurt Idealab's shareholder's investments.

Company officials were outraged.

"These claims are even more absurd and unconscionable now than they were six weeks ago because the plaintiffs and their attorney know full well that the allegations are contradicted directly by the information we have given them," Idealab issued in a statement. "They have made a conscious decision to ignore the facts and continue their publicity stunt."

The company says the investors in question made an investment two years ago, and now, after the dot-com bust, are "attempting to use litigation to rewrite the terms of their private investment."

"Our complaint is based on the information that the gave us," says Miller.