Lawsuit details in today's Seattle Times...
seattletimes.nwsource.com
Wednesday, April 04, 2001, 12:00 a.m. Pacific
CURRENT, EX-INFOSPACE OFFICIALS SUED
by Sharon Pian Chan
Seattle Times technology reporter
A shareholder has filed a derivative lawsuit for $2 billion in damages against current and former directors at Infospace, alleging illegal insider trading and mismanagement at the Internet content and software company in Bellevue.
In the unusual suit, shareholder Nancy Dabney Youtz of Seattle is represented by her husband's law firm, Sirianni & Youtz. She purchased 600 shares of Infospace on April 5, 2000, when its stock was trading at $52.56. Shares closed at $1.72 yesterday.
In a shareholder derivative suit, a shareholder sues the management on behalf of the collective shareholders and company. If the lawsuit is successful, the managers would pay damages to the company, thereby increasing shareholder value.
Youtz alleges that current and former officers engaged in illegal inside trading, failed to disclose that Infospace's business model was no longer viable and approved a merger with Internet portal Go2Net that created no value for the company.
The officers listed in the complaint, filed recently in King County Superior Court, include Naveen Jain, current chief executive; Rufus Lumry III and John Cunningham, board members; Ed Belsheim, chief operating officer; Tammy Halstead, chief financial officer; Arun Sarin, former chief executive officer; Russell Horowitz, former Infospace president and former Go2Net chief executive; and other former executives and their spouses.
Infospace says it is investigating the claims and preparing its response.
"It's not against Infospace," said company spokesman Steve Stratz. "We're looking into it since some of the executives are current officers."
Sharon Pian Chan can be reached at 206-464-2958 or schan@seattletimes.com.
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