Complex IMP lawsuit divided
Testimony opens on dispute between ex-executive, founder. Larger stock fraud
complaint to be heard later. Defendant acting as his own attorney in court
BY GLENN GAMBOA
AND ROGER J. MEZGER
Beacon Journal business writers r
April 29, 1997
The mysterious rags-to-riches-to-rags story of Interactive MultiMedia Publishers Inc.
will remain a mystery for a while longer after an unexpected legal swerve took effect
yesterday.
Summit County Common Pleas Judge Ted Schneiderman late Friday separated the
issues in a complex civil trial involving a former executive at IMP, the Akron-based
developer of touch-screen computer software, and company founder P. Joseph
Vertucci.
A trial involving the issues of back pay and failure to issue stock to the executive,
Richard L. Herbruck of Fairlawn, began yesterday. It may go to the jury for deliberation
as soon as today.
A second case, which involves alleged stock fraud, other issues related to the formation
of IMP, and includes nine other parties besides Vertucci, has not yet been set for trial.
It is the second set of issues that attracted the interest of investigators from the Securities
and Exchange Commission and other federal agencies, who began probing IMP last
year after the company's stock ran up 1,300 percent within a matter of weeks.
IMP stock is now virtually worthless, last trading at one-tenth of a cent per share.
Herbruck's lawyer, R. Scott Haley, said he objected to the splitting of the case into
separate trials because the move would prevent him from delving into other matters that
he said touch on Vertucci's credibility.
However, the postponement of the trial involving the larger issues in the complicated
case was seen as good news by the other defendants.
"I think it's the correct ruling," said Kevin Breen, co-counsel in the case for San
Diego-based La Jolla Capital Corp. "We're obviously pleased he made it."
La Jolla Capital was one of the largest traders of IMP stock during the company's
amazing run-up last year. According to a congressional subcommittee, La Jolla Capital
faces disciplinary action for questionable sales practices.
Several federal agencies are investigating the IMP saga. Some of the potential witnesses
in the civil case have also been contacted by federal investigators.
The civil trial that began yesterday is touching on few of the issues of interest to federal
investigators. But it is offering glimpses of the financial shape of Alive Centers of
America Inc., a multimedia company that Vertucci formed before IMP, and into
Vertucci himself.
Vertucci, who holds a doctorate in educational administration, is serving as his own legal
representation for the trial.
"I had attorneys," Vertucci told the jury during his opening statement. "I spent $50,000
on attorneys that came out of my pocket. But when the bills reached $100,000, they left
me."
The splitting of the issues in the trial, as well as the rigors of actually trying a case,
seemed at times to stymie Vertucci. He was besieged by objections from Haley,
Herbruck's attorney, that were mostly supported by Schneiderman.
To assist his defense, Vertucci brought along a picture of Mohandas K. Gandhi, the
Hindu nationalist leader who was assassinated in India in 1948.
"He's my inspirational lawyer," Vertucci told Schneiderman.
Haley finished the plaintiff's case yesterday -- after calling Herbruck, Alive Centers
accountant Terance Kelley and Vertucci to the stand.
Haley claimed two employment contracts signed by Herbruck and Vertucci proved that
his client was owed nearly $136,000 in back wages as well as a 25 percent share in
Alive Centers stock. Haley also argued that Herbruck was owed $188,470 in loans, and
that Vertucci, not Herbruck, should be responsible for nearly $160,000 in back taxes.
Vertucci claimed that Herbruck, who was president of Alive Centers, should have
known the company was in financial trouble, and that he did not fulfill his duties in
accordance with the contract.
Vertucci, who is expected to testify today, said in his opening statement that he was hurt
by the demise of Alive Centers.
"This company was my dream," he said. "It was a dream I had to impact the quality of
education. Mr. Herbruck was retired from IBM. To him, this was just a sideshow." |
