DoubleClick and MaxWorldwide threatened lawsuits against each other over the sale of DoubleClick’s media business last July, according to a regulatory filing.
In a form filed with the Securities and Exchange Commission on Thursday, MaxWorldwide said DoubleClick informed it on Wednesday the it intends to file a lawsuit seeking $10 million in damages over the sale of its online media business to MaxWorldwide last July, alleging fraud and violation of the merger agreement. MaxWorldwide said in the filing that it disputes the charges and would file a countersuit against DoubleClick for $6.5 million for breaking the terms of the merger agreement.
A DoubleClick spokesperson said the company had not yet decided if it would take legal action.
The dispute arises from DoubleClick’s decision to exit the media business last year. In July 2002, the company reached a deal to sell its North American media business to MaxWorldwide, then called L90. The move was part of DoubleClick’s plan to exit the struggling media business in favor of becoming an online marketing technology supplier.
Since the transaction, MaxWorldwide has been plagued by a host of legal imbroglios. In April, four of the company’s former top executive, including CEO John Bohlan, pled guilty to a number of criminal and civil charges, including securities fraud.
The cases against the MaxWorldwide executives detail a number of schemes to inflate L90’s revenues, using barter transaction and other means to make L90’s advertising business appear more robust. Investigators said L90 engaged in the shady practices to prop up its share price during the Internet boom.
Since buying the ad network from DoubleClick, MaxWorldwide agreed in March to sell it to Focus Interactive, which owns and operates the Excite, iWon and My Way Web sites, for up to $6 million. That transaction was subject to shareholder approval, however, and it’s not clear whether the sale was ever consummated.