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Strategies & Market Trends : The Final Frontier - Online Remote Trading
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From: TFF11/2/2004 8:55:34 PM
   of 12617
 
A $100-mil. lawsuit at Archipelago

By Sarah A. Klein
A lawsuit alleging Archipelago Holdings Inc. founders Gerald Putnam and MarrGwen Townsend cheated a former business partner out of millions of dollars should proceed to trial, a Cook County judge ruled.
The Oct. 27 ruling by Circuit Court Judge Ronald F. Bartkowicz enables Oak Brook businessman Lewis J. Borsellino to pursue his claim that Mr. Putnam and Ms. Townsend diverted assets from a business venture the three owned to found Archipelago, an electronic stock exchange.


The exchange, which is open to the public, is the first of its kind in the U.S., and generated $126.5 million in an initial public offering in August. Judge Bartkowicz dismissed Archipelago from the lawsuit in September, but ruled last week that Mr. Borsellino’s claims against his former partners may proceed.
Mr. Borsellino believes he is owed at least $100 million because his investment in the trio’s former business, Chicago Trading & Arbitrage LLC, allegedly helped to establish Archipelago.

Mr. Putnam and Ms. Townsend returned Mr. Borsellino’s $250,000 investment in Chicago Trading as part of a 1998 settlement agreement and argued the agreement releases them from future claims. Judge Bartkowicz disagreed, saying the release does not prevent the filing of the present suit.

A lawyer for Mr. Putnam and Ms. Townsend declined comment.

A status hearing is scheduled for Dec. 21.
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