Counterclaim filed in WorldPoint case
Advertiser Staff
The wife of one of the founders of struggling WorldPoint Interactive Inc. has filed a counterclaim to a lawsuit by the state, saying the state lied about its relationship with the company and reneged on a deal to accept stock for repayment on a 1995 loan.
Karen Cross, wife of WorldPoint founder and chairman Larry Cross, is seeking to force the state to pay for the lost value of her WorldPoint stock and all her legal costs related to the case.
The filing represents the first legal response to a lawsuit by the state filed in June against several WorldPoint stockholders who guaranteed a $580,000 loan the state gave to the company in 1995. The state now says the company owes about $800,000 including penalties and interest.
But Cross says in her complaint that the state's claims are superceded by an agreement last fall when the state accepted an equity position in the company.
"Our position is they are a stockholder and not a creditor of the company," Jack Morse, Cross' attorney, said yesterday.
Morse said he has been trying to reach a settlement with the state without success.
State officials involved with the case could not be reached for comment yesterday.
The state, which is accused in the suit of breach of fiduciary duty, commercial misrepresentation, fraud, interference with business and libel, has 20 days to respond to the counterclaim.
Like many Internet companies, WorldPoint has seen a significant dropoff in business. The company said it has lost several major clients and was forced to lay off its entire staff of more than 100 people, and close its physical operations in Honolulu.
Larry Cross and co-founder Robert Peterson obtained the $580,000 small business loan from the state in 1995. WorldPoint says that in October 2000, it offered the state full repayment of the loan and all interest accrued, but the state refused.
Massimo Fuchs, WorldPoint's president and sole remaining employee, said the state elected to convert the loan to equity in the company, but tried to back out after the recent downturn in the stock market.
Besides the state, WorldPoint is also being sued by Mark Glen Auctions over an auction the company held last month to raise money. That case is pending.
