Homestore settles suit. (The Digest).Homestore.com Inc. announced a second-quarter net loss of $52.3 million after agreeing to pay $23 million to settle a lawsuit that accused the company of securities fraud. In the second quarter of 2001, Homestore had a net loss of $120.9 million. Homestore's latest results reflect a $23-million charge for the settlement of 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. with telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. company MemberWorks Inc. They also include a gain from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $10.2 million from the sale of the company's ConsumerInfo division this year. Stamford, Conn.-based MemberWorks filed its lawsuit in March, after Homestore restated certain financial statements following an inquiry by the board's audit committee into questionable accounting practices. Homestore had agreed in August 2001 to buy Iplace, an Internet company that collects and analyzes crime information from police jurisdictions, from MemberWorks for about $72 million in cash and stock worth about $78 million. MemberWorks claimed in its lawsuit that it was unable to sell any of the Homestore shares it had received in the sale in the wake of Homestore's restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. . In April, after Homestore announced its accounting problems, the company reached a deal to sell ConsumerInfo, a unit of IPlace, for $130 million in cash to credit-checking company Experian. MemberWorks then obtained a court order placing $58 million of the $130 million cash proceeds in a constructive trust A relationship by which a person who has obtained title to property has an equitable duty to transfer it to another, to whom it rightfully belongs, on the basis that the acquisition or retention of it is wrongful and would unjustly enrich the person if he or she were allowed to retain in favor of upon the side of; favorable to; for the advantage of. See also: favor the plaintiffs, pending the outcome of litigation. Under terms of the settlement, $23 million of the trust will be released to MemberWorks and other former IPlace shareholders to settle their claims. MemberWorks will receive about $19.2 million in cash. Homestore will receive the remaining $35 million of unrestricted cash from the constructive trust after the settlement. |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion