Posted on: Saturday, July 14, 2001
State poised to seize WorldPoint assets
By John Duchemin
Advertiser Staff Writer
Down to one employee and bereft of its downtown offices, struggling Honolulu Internet firm WorldPoint has six days to respond to a lawsuit before the government seizes the company's assets to help repay a bad loan.
WorldPoint President Massimo Fuchs said he plans to respond to the lawsuit, in which the state seeks recovery of $800,000 in principal and interest.
If he fails to respond, state officials say they will move to seize WorldPoint's assets, which as of early June included about $200,000 worth of wall-mounted flat-screen televisions and assorted state-of-the-art computer equipment and monitors.
Fuchs, 41, who is from Switzerland, is now the sole employee of the Web site translation company, which in January had more than 100 workers and several branch offices on the Mainland and in Europe.
Fuchs said the company is still a going concern, though its revenue stream has shrunk to a fraction of the $100,000 per month WorldPoint was earning late last year. WorldPoint is now doing less than $5,000 of business per month, Fuchs said.
The company has ended its lease on a 1132 Bishop St. penthouse suite, and has paid $525,000 to terminate its lease on a building in downtown San Francisco, Fuchs said. Officials at Colliers Monroe Friedlander, property managers for the Bishop Street building, would not comment.
Fuchs said he would keep WorldPoint afloat as a "virtual cybercompany," using independent contractors as online translators to support his sales and marketing efforts. He said he has access to a worldwide network of more than 14,000 translators.
"The good news is that I don't need an office or employees to run this business," he said. "My main focus is on keeping the company alive until we can work through these issues and rebuild the business, hopefully to eventually rehire some of the employees who were laid off."
Fuchs began an aggressive campaign in the late 1990s to expand the company and attract venture capital. He brought in Swiss investors who contributed about $13 million in convertible debt, moved the company downtown from its Manoa offices, hired dozens of employees and bought top-line equipment.
At its peak, the company had annual sales of more than $1 million but was spending in excess of $3 million per year, Fuchs said.
WorldPoint's business suffered over the last six months as the economy faltered and key clients including Kodak, IBM and Mitsui cut back on online expenses. The company laid off about 90 percent of its work force and closed several new offices on the Mainland and in Europe.
Hawai'i Deputy Attorney General Myra Kaichi said the state's lawsuit is unaffected by Worldpoint's staff reductions and the move out of its office. "We still plan to proceed with the case," she said.
The state last month sued WorldPoint and several of its initial investors over failure to repay a 1996 loan. The loan was made through the Hawai'i Capital Loan Program, a state-run business development program that continually has struggled with bad loans.
The loan, made to WorldPoint predecessor Universal Resource Locator Inc., has been delinquent since 1997.
The lawsuit names investors including WorldPoint co-founders Larry Cross and Robert Peterson, plus Brian and Nadine MacNish and Jerry Fuqua, all of whom put their homes or other property up as collateral.
Of the investors, only Fuqua could be reached yesterday afternoon. He declined comment, saying he had not been involved with WorldPoint for more than five years.
Kaichi said the state is working with the individual investors to work out a solution. She would not comment further on the particulars of the lawsuit.
