Battle over stock crash moves to Federal Court
Former partners in the computer kiosk company may have to wait until next year to settle dispute
BY GLENN GAMBOA AND ROGER J. MEZGER
Beacon Journal business writers
The search for answers about what happened to Interactive
MultiMedia Publishers Inc. will take longer than expected.
Attorneys for IMP and its founder, P. Joseph Vertucci, yesterday transferred a civil lawsuit against them from Summit County County Common Pleas Court to U.S. District Court in Cleveland, a move that will probably delay the trial until next year.
The trial, which was to begin in September, would determine the losses, if any, Richard L. Herbruck, Vertucci's former business partner, suffered because of IMP's remarkable rise and fall last year.
IMP was a Wall Street darling last year, when its stock value skyrocketed 1,300 percent. That gave the interactive computer kiosk company, once headquartered in the basement of a Highland Square high-rise, a market capitalSee IMP, Page D5
IMP
Lawyers debate need for move to federal court
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ization of $40 million, about 400 times its sales for the previous quarter.
Securities and Exchange Commission investigators began looking into the activities of Vertucci and IMP after the stock began its spectacular free-fall, one that ended with thousands of shareholders holding stock that is essentially worthless. Sources close to the probe say federal investigators have subpoenaed evidence in the civil case as well as questioned key witnesses.
V. Scott Macom, Vertucci's attorney, said yesterday that the change in venue was necessary because Herbruck's claims focused on issues over which the federal government had jurisdiction.
``It was the only proper forum in which to argue,'' Macom said. ``When the court sees what the issues are, they will agree with us.''
In Ohio, defendants have the right to switch court venues. However, if the court chosen by the defendant does not agree with the switch, the defendant must pay all the fees associated with the change.
R. Scott Haley, attorney for Herbruck, said the move has no merit.
``It's frivolous,'' Haley said. ``It's nothing but a delaying tactic.''
The change of venue will delay the trial several months. Earlier, the dispute was delayed in Summit County Common Pleas Court when Judge Ted Schneiderman split the lawsuit into two last April.
During a trial in April, a six-woman, two-man jury sided with Herbruck, awarding him $101,622.75 -- 75 percent of the wages he claimed Vertucci owed him, as well as some legal penalties. The jury also dismissed Vertucci's counterclaims, which included charges of embezzlement and breach of contract, against Herbruck.
Macom said the delay bothered him as well.
``I would love to argue this case tomorrow, since it's hard to put something on the back burner for a year'' he said. ``But I'm sure we will still prevail.''
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