USATalks falls silent as bills pile up
Don Bauder
September 5, 2000
Once-high-flying USA-Talks.com, defaulting on still more ven-dor payments, has turned its long-distance customers over to its service provider.
A recent letter to customers, telling them of the switch, speaks of "a restructuring of USATalks and its product offerings," but the company's legal administrator, Ken Kennedy, admits: "Quite candidly, I don't know what the company will do from here. We're exploring options."
On Friday, a stockholder commented on Ragingbull.com: "Does anyone know if this company even exists? They don't communicate with their shareholders. Is there an office? Would someone from the San Diego area please go down and knock on the door?"
There are few employees left, Kennedy concedes, and USATalks turned its long-distance customers over to its service provider, SouthNet TeleComm Services (STSI.net), because "we couldn't pay their full bill. We were delinquent."
USATalks originally claimed it had a system of providing telephone service over the Internet.
"It turned out to be too expensive," says Kennedy, and the company, beleaguered by financial woes, unpaid vendors and an investigation by the Securities and Exchange Commission, turned to STSI.net as a service provider and boasted that it was the first company providing long-distance services at a flat monthly fee.
In July, chief executive Patrick J. Mulvey resigned, citing nonpayment of his salary and lack of agreement on contract terms. Other officers were not being paid, along with vendors.
Now the company has forfeited its long-distance customers, although it told its customers in the letter, "We look forward to doing business with you again in the future."
A former executive of the company, Larry Rolen, is touting a new company providing similar services.
USATalks stock zoomed over $50 and then split 4-for-1 early last year. From a peak of around $13 in January of last year, the stock drifted steadily downward. On Aug. 25 it closed at 4 cents, down 1 cent.
Crown Point Villa
Pacific Beach's Crown Point Villa, formerly known as Bay Villa, remains in turmoil, although its owner says it will become a complete condominium complex instead of apartments.
Not long before Christmas 1997, tenants at the building got a lump of coal in their stockings: a 22 percent to 40 percent rate increase.
The building was bought in April 1999 by Safe Harbor II LLC. In midyear, the company said the units, in phases, would be put up for sale as condominiums.
Tenants, given 30 days' notice of the change, were enraged. A lawsuit was filed, and Superior Court Judge Linda B. Quinn ruled that Safe Harbor had engaged in unfair business practices, and would have to give 180 days' written notice to tenants before converting their apartments to condos.
Safe Harbor appealed both findings. As of now, 24 units are in escrow to become condos, 69 units are occupied by renters and 47 are vacant because of voluntary departures, says Safe Harbor's attorney, Dan Lawton.
However, Blumenthal, Ostroff & Markham, the attorneys who represented the tenants, suffered a blow: One of the plaintiffs moved to China and another, Theodore Segall, declared in a signed statement that he had not hired the Blumenthal firm, his name had been put on the lawsuit without his knowledge, and he didn't believe the firm was entitled to the $137,000 in legal fees it was seeking from Quinn.
Last month Quinn denied the firm its fees, ruling that the suit "neither initiated nor resulted in the enforcement of an important right affecting the public interest." However, there will be another hearing on the matter Friday.
The benefits of the lawsuit go to a lot of tenants, not just the two plaintiffs who have dropped out, argues attorney Norman B. Blumenthal, also noting that the firm had received its fees of $15,000 on behalf of one tenant in an earlier suit.
There is a sideshow. Someone posted on an electronic bulletin board some negative remarks about attorney Barron Ramos of the Blumenthal firm. Among other things, the message said he was a "just out of law school wannabe."
Ramos, a former tenant of the complex, sued Safe Harbor for slander. Safe Harbor says Ramos can't prove who wrote the offending prose. |
