Lawsuit filed....
Jones Naughton Files $60 Million Lawsuit Against AmeriNet Financial Systems et al
Business Wire - August 19, 1998 07:45
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LOS ANGELES--(BUSINESS WIRE)--Aug. 19, 1998--Jones Naughton Entertainment, Inc. (OTC BB:JNNE) announced today the Company has filed a $60 Million lawsuit against AmeriNet Financial Systems, Inc. (OTC BB:ANFS), ANFS, Inc. and individuals John J. Pembroke, W. P. Yeager, Phillip J. Yeager, Eric Cunliffe, Winston Hickman, Vicki Burklin and Alan Nopar.
Jones Naughton's lawsuit, filed in Orange County Superior Court, claims $60 Million in actual and punitive damages due to the failure of AmeriNet to honor primary contractual obligations included in the sale of Jones Naughton's Real Estate Television Network to AmeriNet in October of 1996.
Jones Naughton's complaint for damages includes allegations of Fraud, Breach of Fiduciary Duties of Officers and Directors, and Breach of Written Contract.
Jones Naughton operated the Real Estate Television Network as a wholly-owned subsidiary until agreeing to sell the network to AmeriNet in 1996 for ANFS stock, valued at the time at over $5 Million. According to Jones Naughton, in November of 1996, subsequent to the completion of this agreement, Jones Naughton issued a request to AmeriNet for the stock owed Jones Naughton pursuant to the terms of compensation in the "stock only" transaction agreed to by both parties.
In February of 1997, ANFS issued the initial 1 million shares of preferred ANFS stock, a partial payment of the total shares owed to Jones Naughton. Since November of 1997, Jones Naughton states it has made numerous requests to have the preferred stock converted to common stock and to have the restrictive legend removed from the 1 million shares as per the agreement between the parties.
Jones Naughton also claims that AmeriNet has consistently denied or ignored repeated requests from Jones Naughton to remove the restrictive legend on the previously issued shares and has additionally refused to issue the remaining shares due Jones Naughton. These actions by AmeriNet leave Jones Naughton no option other than to seek legal remedy.
Jones Naughton has retained the services of Turner and Reynolds, a prestigious law firm in Irvine, CA, specializing in civil litigation. Senior partner Frederick E. Turner will represent Jones Naughton.
Jones Naughton President Joe Naughton spoke on the Company's recent action against AmeriNet saying, "We have been very patient and have exhausted all possible friendly solutions. It is not our intent to diminish AmeriNet's business or reputation. However, they have repeatedly refused to comply with the terms of the agreement signed by the officers of AmeriNet.
"Jones Naughton's value as a public Company, both real and perceived, has been diminished considerably by the actions of AmeriNet. Funds from the AmeriNet transaction would have allowed us to take advantage of several considerable acquisitions that would have been substantially accretive to share value. The lost business opportunities alone, over the past 18 months, represent a potential of untold lost revenues for our Company."
Mr. Naughton concluded, "We look forward to resolving this issue as quickly as possible. Our focus must be Jones Naughton's stability and growth. With our recent acquisition of Affiliated Marketing Services, we are developing the momentum necessary to increase share value and elevate the market's confidence in Jones Naughton."
This press release contains forward-looking statements that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Expression of future goals and similar expressions reflecting something other than historical fact involve risks and uncertainties. The actual results the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties.
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