$178 Million Record Setting Verdict Against An Internet Company Is A Wakeup Call To Corporate America Says Attorney Ben DiMuro.Business Editors ALEXANDRIA, Va.--(BUSINESS WIRE)--Aug. 20, 2002 Preventative Maintenance Helps Companies Large And Small Avoid Future Liabilities A landmark judgment against Internet Company TutorNet was rendered last week in Alexandria, Virginia's U.S. District Court as reported in The Washington Post and The Potomac Tech Journal. The jury held corporate officers and entities accountable for fraud and misrepresentation misrepresentation In law, any false or misleading expression of fact, usually with the intent to deceive or defraud. It most commonly occurs in insurance and real-estate contracts. False advertising may also constitute misrepresentation. by awarding over $178 million in compensatory and punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. to 13 shareholders. Additional claims on behalf of other shareholders will now be pursued. "Imprecise or inflated statements to potential investors about the strength of revenues can be seen as half truths; moreover, casual use of the word "partnership" by Internet Companies to describe business relationships creates serious legal implications and potential consequences," says Ben DiMuro, Managing Partner of DiMuro, Ginsberg & Mook mook n. Slang An insignificant or contemptible person. [Probably alteration of moke.] . "Corporate Leadership and Investor Relations Investor relations The process by which the corporation communicates with its investors. personnel need to be well trained to clearly communicate and represent the true nature of revenues and affiliations to novice and sophisticated investors." In the case of TutorNet, the Company claimed to have revenue-generating contracts and `partnerships' with marquee Companies such as America Online See AOL. (AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. ), Prentiss Hall, ToysRUs and others. In some cases, no contract ever existed. In others, the contract was a "pay to play" advertising deal with no guaranteed revenue resulting. Nevertheless, TutorNet defendants falsely represented actual and projected revenue from these relationships whether they existed or not. The various judgments against defendants - TutorNet.com Group, Inc. (TTNP TTNP Tactical Telephone Numbering Plan ); TutorNet.com, Inc; Euburn Forde, Founder, Chairman and former Chief Executive Officer; and Rajiv Dalal, Co-Founder and at one time Chief Financial Officer - represent one of the largest civil awards ever made by a jury in the State of Virginia. Primus Telecommunications (PRTL PRTL Post-Registration Training and Learning ), Primus subsidiary Tutornet.com Services, Inc., CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Paul Singh and CFO See Chief Financial Officer. Neil Hazard were at one time defendants in the case; however, Judge Leonie Brinkema Leonie M. Brinkema (born 1944, in Teaneck, New Jersey) is a United States District Court judge, in the Eastern District of Virginia. From Dutch descent, judge Brinkema received her B.A. dismissed all Primus-related defendants midway through the two-week trial. Attorneys representing the shareholders intend to appeal that decision, and if successful, will seek to hold the Primus defendants responsible for the award of damages. "The role of Primus in this case is a classic example of incubation gone awry," DiMuro adds. "Strategic investors and venture capitalists need to be vigilant in observing corporate formalities and maintaining their role as a passive investor." Primus Telecommunications and the Primus-related defendants were originally part of the case because of an unusual relationship with TutorNet. Primus Telecommunications had signed a term sheet with Tutornet.com to acquire 19.9% of the company in return for a $400,000 investment with the rights to acquire up to 51% of the company when it went public. Primus also formed a wholly-owned subsidiary, TutorNet.com Services Inc., through which, they channeled their investment. Documents filed with governmental entities list Forde and Dalal as employees and officers of Primus subsidiary, TutorNet Services. Services administered the payroll and health benefits of the persons who were selling TutorNet's shares and Primus provided other infrastructure support to TutorNet.com. Primus, moreover, signed a letter to AOL representing that it had "partnered" with TutorNet and was providing it with financial and communications support as it embarked on its initial investment strategy. According to allegations raised by shareholders, Forde and Dalal were officers of the Primus subsidiary and Primus in effect employed the persons who Tutornet used to solicit funds using misrepresentations as found by the eight-person jury. As stated previously, Primus defendants were dismissed from the case midway through trial, and plaintiff's attorneys intend to appeal the decision. Attorneys responsible for winning this extraordinary judgment in favor of their clients are: Wayne D. Collins of Collins & Watson, Houston, TX; John Clifford of Clifford, Lyons & Garde, Washington, D.C.; Ben DiMuro of DiMuro, Ginsberg & Mook, Alexandria, VA; and G. P. Hardy III of Hardy & Johns, Houston, TX. To read more about this case, please see: http://www.washingtonpost.com/wp-dyn/articles/A24528-2002Aug15.html, and http://www.potomactechjournal.com/displayarticledetail.asp?Art_ID=59321. About DiMuro, Ginsberg & Mook DiMuro, Ginsberg & Mook, P.C. is a specialized litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. firm located in Northern Virginia. The firm's practice focuses primarily on general and complex civil litigation in the areas of corporate & commercial law, business torts, criminal law, employment & labor law labor law, legislation dealing with human beings in their capacity as workers or wage earners. The Industrial Revolution, by introducing the machine and factory production, greatly expanded the class of workers dependent on wages as their source of income. , and professional liability & ethics. http://www.dimuro.com |
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