Ex-partner wins suit vs. head of IMP
Jury awards $109,000 in back wages and penalties in dispute over stock. Trial on related issue is pending
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By Glenn Gamboa
Beacon Journal business writer
May 1, 1997
A Summit County Common Pleas jury yesterday unanimously sided with a former partner of Akron businessman P. Joseph Vertucci on all claims against the embattled executive.
Under the terms of the verdict, Vertucci must pay Richard L. Herbruck, his former business partner in Akron-based Alive Centers of America Inc., $101,622.75 in back wages and $7,890 in penalties relating to a stock request.
Herbruck had earlier won a judgment for $188,470 in loans Herbruck made to Alive Centers. But Herbruck's lawyer says that judgment has not been paid.
Vertucci's counterclaim against Herbruck, which alleged that Herbruck had breached his employment contract and had embezzled money from Alive Centers, was denied. Vertucci's former accountant, Terance Kelley, testified that no money was ever reported missing from that company.
Vertucci is president of Interactive MultiMedia Publishers Inc., a company that absorbed Alive Centers two years ago. IMP and its dealings are the subject of a federal investigation.
"Mr. Vertucci, I realize you have suffered great personal and financial hardship in your life," said Jon Surprise, of Akron, the presiding juror in the case.
Surprise then delivered the verdicts against Vertucci, who continued to stare straight ahead as the decisions were read.
After hearing the verdicts, Herbruck got up from his seat and shook hands with each of the six women and two men of the jury, saying, "I just wanted to thank you all for your deliberations and listening to the words of truth today."
The jury's decision put an end to the first of two trials regarding Herbruck's claims against his former employers.
A pretrial hearing is scheduled for tomorrow to determine when the second trial will begin in the court of Summit County Common Pleas Judge Ted Schneiderman.
The second trial will address some of the issues that have put Vertucci and others under the scrutiny of the U.S. Securities and Exchange Commission.
The SEC began investigating IMP last year after the stock of the Akron-based touch-screen computer kiosk developer ran up 1,300 percent within weeks. Other federal agencies also are investigating.
Vertucci and IMP are defendants in the second trial, along with La Jolla Capital Corp., a San Diego-based brokerage that faces disciplinary action by the National Association of Securities Dealers for its dealings in "penny stocks" -- companies whose shares usually trade for less than a dollar.
Stock in IMP, a penny stock company, has been virtually worthless since the SEC temporarily halted trading in the stock in December. The SEC questioned the validity of some of the company's financial statements.
The halt led to a further collapse in the stock, leaving hundreds of investors around the country with unexplained losses.
Herbruck has argued that he is one of those investors.
The verdict in the Herbruck-
Vertucci trial affirmed a 1995 employment agreement that gave Herbruck ownership of 25 percent of the shares in the privately held Alive Centers. The agreement was signed about two months before Vertucci took his multimedia business public under the name IMP.
What the jury in the next trial will decide is whether those shares, which were promised but never issued to Herbruck, should have been converted to IMP stock and whether Herbruck suffered financial losses because he did not have access to the stock when it made its remarkable run-up in 1996.
Both sides see the second trial as a bigger test.
"We are very pleased with today's outcome," said R. Scott Haley, Herbruck's attorney. "We are ready to go on to the next phase."
V. Scott Macom, the Akron attorney who stepped into the case in mid-trial to represent Vertucci, said he was disappointed with the jury's verdict.
"I thought there was a clear breach of fiduciary duty," said Macom. "But we will begin to prepare for the next phase, and we will do as well as we can."
Macom said he will likely continue as Vertucci's attorney for the next trial, even though his entrance into this trial was rather abrupt.
"The reason I took this case is that I'm a good lawyer with a big heart," said Macom. "Most shrewd business lawyers wouldn't have. But he was a guy in trouble. And we practice law for more reasons than just making money. |
