Re: 12/2-3/04 - [IPMT] BW: iPayment Loses Motion in Bankruptcy Case Brought by U.S. Bankruptcy Trustee; Attorneys Disqualified; iPayment, Inc. Responds to Press Release Regarding Suit Filed against the Company; Am Bus J:iPayment forced to get new attorneys to defend Calif. suit
December 02, 2004 07:02 PM US Eastern Timezone
iPayment Loses Motion in Bankruptcy Case Brought by U.S. Bankruptcy Trustee; Attorneys Disqualified
LOS ANGELES--(BUSINESS WIRE)--Dec. 2, 2004--iPayment, Inc. (Nasdaq:IPMT) today was handed a defeat in the case of ITSV Inc. v. iPayment et. al., pending in the United States Bankruptcy Court, Central District, Los Angeles, California. At a hearing today in the Courtroom of Bankruptcy Judge Vincent Zurzolo, Greenberg & Bass, iPayment's long-time attorneys and present counsel defending iPayment against the fraud claims brought against the company and its principals by Howard M. Ehrenberg, United States Bankruptcy Trustee, were disqualified from further representation when the Judge ruled that they were in violation of the Rules of Professional Responsibility and the California Business and Professions Code by representing iPayment after they had previously represented adverse party, ITSV.
The Motion to Disqualify was successfully brought by Special Counsel to Trustee Ehrenberg, Pratter & Young, Attorneys, who alleged that the conduct of iPayments lawyers was a violation of the lawyer's Canon of Ethics. Judge Zurzolo agreed and ordered their immediate removal. iPayment is now in search of new lawyers.
Robert J. Young, Esq., principal of Pratter & Young, commented on this initial victory: "This is but the first step toward the eventual defeat and exposure of iPayment's fraudulent activities. We are confident of our case and its eventual successful resolution in favor of our client Mr. Ehrenberg, who represents the interests of those creditors and other parties damaged by scandalous conduct of the corporate defendants. When queried further into the particulars of the case, Mr. Young declined any further detailed discussion but did conclude: "iPayment's entire foundation could very well be at stake if we are successful. Mssrs. Grimstad, Daily, and Torino, the individual perpetrators and driving force behind these schemes, are gambling that we won't be. I'm not so sure that these businessmen will risk their entire company which is what this lawsuit is all about. The Trustee and his counsel are confident that they will come to their senses and accept responsibility before it is too late."
All other motions in the case were continued until January 14, 2005, in order to give iPayment an opportunity to hire new counsel.
Contacts
Pratter & Young
Michael S. Pratter, 310-391-3311
msp@pratterandyoung.com
Robert J. Young, 310-820-2988
rjy@pratterandyoung.com
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December 03, 2004 08:22 AM US Eastern Timezone
iPayment, Inc. Responds to Press Release Regarding Suit Filed against the Company
NASHVILLE, Tenn.--(BUSINESS WIRE)--Dec. 3, 2004--iPayment, Inc. (NASDAQ: IPMT) today issued the following statement in response to a press release issued by the law firm of Pratter & Young regarding a suit against the Company and certain officers and directors in the United States Bankruptcy Court on behalf of a U.S. Bankruptcy Court Trustee. The law firm of White & Case, the Company's counsel who has been advising the Company with respect to this matter, will now serve as counsel of record for the Company with respect to this matter, replacing the law firm of Greenberg & Bass. The Company believes that this complaint and the underlying allegations are without merit and intends to vigorously defend against them.
This press release contains forward-looking statements about iPayment, Inc. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. For example, statements in the future tense, words such as "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance used in connection with any discussion of future results, performance or achievements identify such forward-looking statements. Those forward-looking statements involve risks and uncertainties and are not guarantees of future results, performance or achievements, and actual results, performance or achievements could differ materially from the Company's current expectations as a result of numerous factors, including but not limited to the following: acquisitions; liability for merchant chargebacks; restrictive covenants governing the Company's indebtedness; actions taken by its bank sponsors; migration of merchant portfolios to new bank sponsors; the Company's reliance on card payment processors and on independent sales organizations; changes in interchange fees; risks associated with the unauthorized disclosure of data; imposition of taxes on Internet transactions; actions by the Company's competitors; and risks related to the integration of companies and merchant portfolios the Company has acquired or may acquire. These and other risks are more fully disclosed in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for 2003. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
iPayment, Inc. is a provider of credit and debit card-based payment processing services to over 100,000 small merchants across the United States. iPayment's payment processing services enable merchants to process both traditional card-present, or "swipe," transactions, as well as card-not-present transactions, including transactions over the internet or by mail, fax or telephone.
Contacts
iPayment, Inc., Nashville
Afshin M. Yazdian, 615-665-1858, ext. 107
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December 3, 2004
iPayment forced to get new attorneys to defend Calif. suit
iPayment Inc. has had to hire new attorneys to represent it in a lawsuit pending in the United States Bankruptcy Court in Los Angeles.
Judge Vincent Zurzolo ruled yesterday that Encino, Calif.-based law firm Greenberg Bass, which has been defending the company against fraud claims alleged by United States Bankruptcy Trustee Howard Ehrenberg, are not qualified to represent the company because they had previously represented ISTV Inc., the company at the core of Ehrenberg's claims against iPayment.
iPayment, a Nashville-based provider of credit and debit card payment processing services, has hired Los Angeles law firm White & Case as its replacement counsel.
The lawsuit centers around the creation of iPayment (Nasdaq: IPMT) out of CreditCards.com, a company acquired by an investment entity, Caymas LLC, in 2000 from Richard Gordon and ITSV.
Ehrenberg is suing iPayment and its founders on behalf of ITSV, Gordon and investors in ITSV, seeking general damages of $52.7 million and triple damages of about $158 million.
As of 1:15 p.m., shares of iPayment were trading down 1.0 percent at $38.41. Their 52-week range is $25.61 to $46.42.
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