IMP Leftovers sell at Bargain!
Belongings of company, its founder auctioned
BY ROGER J. MEZGER AND GLENN GAMBOA
Beacon Journal business writers
GREEN: The remains of Interactive MultiMedia Publishers Inc. scattered far and wide last week, auctioned at bargain prices in the former garage of P. Joseph Vertucci, the company's founder and chief executive officer.
Beset by financial, legal and regulatory problems, the Akron company has all but ceased to exist. Last week, the leftovers were sold, along with Vertucci's house, some furnishings and other personal items, to the accompaniment of an auctioneer's catchy cadence.
``Opportunity.'' That's how the auctioneer described the everything-goes sale to about 100 mostly cautious bidders on a cool, cloudy evening. The word rolled off his tongue like a mantra -- often followed by, ``You want it? Gimme a dollar.''
Little more than two years ago, IMP was a Wall Street darling, a hot stock tip, a new public company in an exciting new industry, multimedia, that was attracting investors. At one point, although IMP had few sales, its market capitalization was $40 million.
For a few stock pickers, giddy over the record-setting success of the stock market, IMP was a dream come true. A stock with potential. A golden opportunity.
But opportunity doesn't guarantee success.
Sometimes opportunity is just an illusion. Some people, from federal investigators to some of Vertucci's former business partners and employees, suspect that may have been the case with IMP.
What really happened to IMP may take years to unravel, as investigators and attorneys pore over the company's financial records. Nevertheless, the brief opportunity known as IMP has all but vanished. The consequences, however, remain.
And the consequences for Vertucci last week -- beyond the lawsuits and the pending investigations -- were that pieces of his life, the symbols of his fleeting success, were strewn about his house and yard, waiting to become someone else's opportunities. Vertucci was not there to see it.
For the bargain-hunting, shorts-wearing, after-work auction crowd in Green, ``opportunity'' conjures up the same vision of success that it does for the bargain-hunting, suit-wearing, workaday brokers on the trading floor of a stock market.
Fork over the cash and, one would hope, enjoy a nice return on a relatively small investment.
And for nearly three hours Tuesday evening, that's exactly what the bidders did in what is now Vertucci's former back yard, behind his former home in Green's Prestwick Estates.
The massive desk Vertucci bought for his office last year, after the remarkable 1,300 percent run-up in the high-tech company's stock, stood against a garage wall. Sold! For $125.
A good selection of computer equipment, including a monitor still emblazoned with the IMP corporate logo, sat nearby. Sold! For about $2,000 total.
Outside, just off the driveway, lounged a black 1988 Jaguar XJS convertible with fewer than 58,000 miles on its V-12 engine. Sold! For $11,000.
In an interview in January, Vertucci defended the purchase of the luxury car last year when his company couldn't pay its employees. The car was ``a corporate asset,'' he said.
``People gave me a loan against the car,'' he said. ``It's a hard asset.''
USGA deal falls apart
It was one of the few hard assets IMP owned.
The public company, which Vertucci and others created in 1995, designed computer kiosks for sports venues. The kiosks presented users with entertainment and information along with money-making advertising.
With the personal computer boom making people less phobic about technology, the time may have been right for the kiosks, one of which sits in Gund Arena in Cleveland.
The company had a national deal for its kiosks pending with the U.S. Golf Association in December. But then the U.S. Securities and Exchange Commission halted trading of IMP stock for two weeks while the regulatory agency stepped up its months-old investigation of company operations.
Following the SEC action, the USGA deal fell apart, and IMPs' stock turned virtually worthless. The company never recovered. With no cash coming in, IMP paid its Highland Square landlord in computer equipment, then moved out in March.
In April, a Summit County Common Pleas Court jury ordered Vertucci to pay a former business partner more than $109,000 in back wages and other debts. A second trial in that lawsuit, seeking more money, will be held later, perhaps in federal court. The former partner, Richard L. Herbruck, earlier won a separate judgment for repayment of $188,470 in company loans he had made.
Herbruck has not been paid on either judgment.
So the day after the auction at Vertucci's house, Herbruck's lawyer, R. Scott Haley, obtained a temporary restraining order from Summit Common Pleas Judge Jane Bond. The order prevents the auctioneers, Russ Kiko Associates Inc. of Canton, from dispersing the money from the auction until a hearing is held June 30 on a lawsuit maintaining that Herbruck is entitled to some of it.
V. Scott Macom, Vertucci's attorney, said Herbruck has no claim on the auction's proceeds because the judgment for Herbruck was against Vertucci's company, not his personal accounts.
The auction marked the bottom of a long fall for Vertucci and IMP. For a few weeks in early 1996, both appeared poised for success. IMP's stock price exploded from 56 cents a share to $8 as the company began touting its opportunity with the USGA.
But the stock quickly retreated, then came crashing down at year's end after the SEC questioned the truthfulness of some information IMP was giving its investors.
Today, IMP exists only on paper.
Hundreds of shareholders own worthless stock that, in some cases, promoters encouraged them to buy. Many former employees say they are owed from $1,000 to $30,000 in salary, commissions and benefits they didn't receive as the company struggled through 1996. One employee worked a year and a half without pay, up to the bitter end.
Vertucci had struggled to raise money to operate his businesses since he became a multimedia pioneer in the 1980s, developing a sports medicine videodisc called The Active Knee.
``The problem is, we've never had enough capital,'' he said in January. ``And it goes back to trying to raise money in this environment where I've had people tell me that multimedia is not even an industry.''
The auctioneers had better luck finding cash last week, bringing in more than $300,000 for the house, the car, the office equipment, some household furnishings and other items -- including a mechanical leg presumably used in the making of The Active Knee.
``They're moving on,'' auctioneer Russ Kiko said before the auction started, explaining to the bidders the reason for the sale. ``They need to convert the real estate into money.''
More than the car and the computers were snapped up at the three-hour sale in the upscale neighborhood. Some of the trappings of Vertucci's moderately affluent lifestyle were on the block, too. The house was the main attraction.
``It's not an extravagant house,'' Vertucci said in January of the four-bedroom, Tudor-style home. He had leased it last summer for a promise of 100,000 shares of IMP stock -- while missing payroll at the office. At the time of the sale, he was buying it on land contract.
The 14-year-old brick and stucco house, about a seven-iron shot off the Prestwick Country Club golf course, went for $190,000. The master suite includes a fireplace, a black-tiled Jacuzzi and a balcony overlooking the professionally landscaped yard.
As bidders toured the house before the sale, they may have noticed a few books remaining on the shelves in the study. The 1995 manual for the Nasdaq Stock Market, where IMP stock had traded, was tucked between Lewis Carroll's Alice in Wonderland and Star Power, an astrology book by Jacqueline Stallone, Sylvester's mom.
The slate pool table in the finished and carpeted basement was sold, along with artwork, Chinese rugs, Christmas decorations -- even what auctioneer Kiko described as ``the most unique birdhouse you've ever seen.''
Suit in federal court
Richard Kiko, who handled the sale for Kiko Associates, declined to say who would have received the money had the court not stepped in.
Haley, the lawyer who is trying to collect on the nearly $300,000 in court judgments against Vertucci for his client, was temporarily stymied in his effort to keep the money from being divided up without him.
That's because days before the auction, Vertucci's attorney transferred the second part of a complex lawsuit involving Vertucci and others to U.S. District Court in Cleveland from Summit Common Pleas Judge Ted Schneiderman's court in Akron.
But U.S. District Judge Leslie Brooks Wells wants to send the case back to common pleas court. The maneuvering left Haley without a judge assigned to the case.
Macom said he expects to respond to Wells' order this week, and he expects the case to remain in federal court, which would delay the trial until next year. It had been scheduled for September.
While SEC officials have declined to comment about the agency's investigation into IMP, sources say the SEC and other federal agencies are looking into, among other things, the company's dealings with La Jolla Capital Corp., a San Diego brokerage and investment-banking house.
The National Association of Securities Dealers is investigating La Jolla Capital for its trading in ``penny stocks'' -- shares of companies, such as IMP, that usually are bought and sold for less than a dollar.
Vertucci said in April that he was cooperating with investigators from more than one federal agency, alleging that the greed of unscrupulous brokers and former associates is what ruined his company.
``The whole driving force in this industry is really greed -- so much so that I have this in my mind, that when I have time, I want to write a book called The Greed Tree,'' Vertucci said in January.
At the auction last week, bidders were thinking about their own opportunities. They calculated the value of the remnants of Vertucci's private and professional lives, marked them down and bought them for pennies on the dollar.
All except one item, which did not sell: a box of videodiscs that Vertucci had used in his business.
No one took the opportunity to bid on it.
``You want it?'' Russ Kiko asked one last time before moving on. ``Gimme a dollar. Opportunity.'' |
