Posted on: Tuesday, August 7, 2001

Internet firm WorldPoint sued by auction company

By Frank Cho
Advertiser Staff Writer

The company that auctioned thousands of dollars in furniture and equipment for Worldpoint Interactive Inc. to pay creditors is now suing the once high-flying Honolulu Internet company after it withdrew nearly one-third of the equipment originally earmarked for sale.

Mark Glen Auctions, which filed the complaint Friday in 1st Circuit Court, said the withdrawal of the equipment was a breach of contract and resulted in loss of income for the company.

The auction company is asking the court to decide who should get the proceeds from the auction, which have been deposited in an escrow account, and about 200 pieces of equipment still being held in storage.

"I did this to protect the interests of the state," said Mark Glen, who owns the Honolulu auction house. "I think there is a real concern about what was going to happen with that money."

Worldpoint, which suffered financially over the past year as the economy slowed, owes the state about $800,000 in principal and interest from a 1996 loan. The state sued Worldpoint in June after the company failed to repay the loan. The state is also named as a defendant in Mark Glen's complaint.

State officials could not be reached for comment yesterday.

Worldpoint's president said yesterday that the lawsuit, if not resolved quickly, could push the company into bankruptcy.

"We were hoping this auction was going to yield enough money to get us going, but instead the auctioneer won't give us the money," said Massimo Fuchs, Worldpoint's president. Fuchs said the company thought it could raise as much as $500,000 from the sale.

More than 2,400 people turned out for the auction. But Fuchs said only a fraction got to bid on equipment because of poor planning by Mark Glen Auctions.

The July 28 auction raised $171,824.65, according to a statement by Mark Glen Auctions. The auction company took nearly half of that in fees, leaving Worldpoint with just over $99,000 in profits, according to the statement.

The day before the auction, Worldpoint told Glen not to sell certain items. Glen put the items in storage, but charged Worldpoint a commission for the equipment as if they were sold. "We followed the contract. That's all I can say about that," Glen said.

Worldpoint attorney James Evers said the company is considering filing its own lawsuit against Mark Glen Auctions and is talking to state attorneys about possible action.

"This comes at a most inopportune time because we are already defending ourselves against a lawsuit by the state," Evers said.

Evers said there are a number of questionable charges the auction house is claiming that pushed its fees to nearly 50 percent of the total sales, including lawyer fees and equipment sold at lower-than-authorized prices.

Evers said the contract called for about $20,000 in fees.

Worldpoint, which once employed 100 people, has no employees except for Fuchs. The firm provides Internet translation software for Web sites and once had annual revenues of $1 million. But as its customers pulled back, it closed offices and let employees go.

Fuchs said he still wants to keep the company alive, which is why he asked the auction house to set some of the company's equipment aside rather than auction it.

"This is not a bankruptcy sale," Fuchs said. "We don't have to sell everything."

A hearing date has not been set.