FROST WARNING
by Lee M. Webb
Imagis Technologies Inc. lawyer Stephen Fitterman of Shapray Cramer & Associates, standing in for the vacationing Howard Shapray, sent an icy blast to California-based Red Herring Communications Inc. on Oct. 9. In a perplexing patois of bumbling bombast and limping legalese, Mr. Fitterman warned Red Herring against supporting any new article about Imagis by veteran journalist Christopher Byron.
Mr. Shapray, litigator of choice for many Vancouver promoters and now representing Imagis, filed a libel suit against Red Herring and Mr. Byron in the Supreme Court of British Columbia on Sept. 10 over an unflattering article. According to Imagis, Mr. Byron maliciously defamed the company and its management and directors in an article first published on the Internet by Red Herring on Aug. 5 and subsequently republished in the September print edition of Red Herring magazine.
On Sept. 27, Imagis filed an amended statement of claim, alleging that Red Herring further libelled the company by subsequently claiming that it stood behind Mr. Bryon's twice-published article. Moreover, Red Herring further defamed Imagis by allegedly attempting to justify in a so-called second article the truth and accuracy of the first allegedly defamatory article, the Vancouver biometric player claims.
On Oct. 9, David Sutherland of David F. Sutherland & Associates filed a notice of appearance on behalf of Red Herring and Mr. Byron. On the same day, Mr. Fitterman, surrogate legal snowman for Mr. Shapray, faxed his hoary warning to warning to Red Herring.
Canada Stockwatch obtained a copy of Mr. Fitterman's frosty missive on the condition that the identity of the source would not be disclosed. Stockwatch will honour that commitment.
"We are disappointed to learn that Christopher Byron is continuing to advance his campaign against Imagis, albeit on other fronts," Mr. Fitterman wrote, quickly trotting out a couple of military metaphors. "We understand that, introducing himself as a New York Post reporter, he has been actively attempting to elicit from third parties personal information concerning certain officers and directors of Imagis and/or other persons associated with the company."
During the course of Mr. Byron's more than 30 years as a journalist writing about business and finance, he has worked as an editor and correspondent for Time, an assistant managing editor of Forbes, and has written several books and many magazine articles. In addition to being a contributing editor and financial columnist for Red Herring and MSNBC, he is also a columnist for the New York Post.
Stockwatch asked Mr. Fitterman to provide the basis for his understanding that Mr. Byron has been actively attempting to elicit information from third parties concerning certain officers and directors of Imagis or others associated with the company. Mr. Shapray's stand-in refused to respond. Mr. Byron, as he has consistently done when invited by Stockwatch, declined comment on matters related to the litigation.
"As none of these third parties could seem to provide any information relevant to the issues raised by or related to the Red Herring article, it appears that Mr. Byron is planning to pen some type of inflammatory interpretation based upon the most tenuous background material - something akin, perhaps, to the character assassination contained in his last heavily criticized book," Mr. Fitterman continued, evidently warming to his chilly task and delivering a piece of bombast almost worthy of the grandiloquent Mr. Shapray.
Stockwatch asked Mr. Fitterman how he knew that none of these unidentified "third parties could seem to provide any information" relevant to the pertinent issues. Mr. Shapray's stand-in was also asked to provide the foundation for his claim that Mr. Byron's book was heavily criticized and the basis for his claim that it contained a character assassination. Mr. Fitterman was also asked whether he had even read Mr. Byron's latest book prior to faxing his chilly correspondence to Red Herring. Mr. Shapray's surrogate refused to respond to those questions as well.
Mr. Byron's latest book, Martha Inc.: the incredible story of Martha Stewart Living Omnimedia, has undoubtedly received some criticism. Indeed, unlike penny-stock promoters and their offerings, credible authors expect that their work will be subject to criticism; it is part of the process of separating the wheat from the chaff. Mr. Byron's latest book was widely reviewed in the U.S. and Canada and, in fact, around the world. Those reviews, including reviews by The Wall Street Journal, The New York Times, the National Post, The Economist, the Financial Times, the South China Morning Post and other publications were overwhelmingly highly favourable.
The overwhelmingly favourable reviews of Martha Inc. may in part explain why Mr. Byron's book spent much of the summer on the best-seller lists in both the U.S. and Canada. They may also partly explain why Martha Inc. is still in demand in mid-October.
Stockwatch recently checked the Vancouver Public Library and Toronto Public Library catalogues for the holdings and availability of Martha Inc. The Vancouver library system reports that it has 14 copies of Martha Inc., none of them currently in the library and with a number of holds already in place. The Toronto library has 87 copies of Mr. Byron's latest book, only four of which were very temporarily listed as being in the library. There were 218 holds on the book.
Quite apart from the highly favourable reviews of Martha Inc., there are other, more significant, reasons for the very evident popularity of Mr. Byron's book. It is an eminently readable, well researched, and careful account of the development of possibly the most recognized woman and marketing image in America, Martha Stewart, told by a talented craftsman drawing on more than 30 years of journalistic experience.
Devout "Martha" fans, including those who might have some difficulty with the notion that Ms. Stewart even so much as spits when she brushes her teeth, may well find parts of Mr. Byron's book disturbing. Not surprisingly, there is more to Ms. Stewart than her homey "everything gal" media image; and not all of it is appealing. Mr. Byron lays out some of Ms. Stewart's less public side, and it clashes loudly with the "Martha" media image.
While Mr. Byron chronicles some of Ms. Stewart's abusive, egotistical, manipulative, narcissistic and scheming behaviour, sketching out feuds with her neighbours, a failed marriage and a nasty divorce, and disturbing accounts of how she used friends and then discarded them like soiled napkins once they had served her purpose, he does not revel in that telling. Indeed, Mr. Byron comes closest to delight in his book not when detailing Ms. Stewart's nasty side, but when offering his account of her incredible business achievements.
Skillfully woven into Mr. Byron's story are some of the sweeping economic, political and social changes of the past 50 years and the resulting zeitgeist that provided the enabling conditions for Ms. Stewart's ambition and vision. The veteran journalist does not stint in crediting Ms. Stewart's business acumen and energy in his account of how she realized that ambition and vision, running circles around the executives of giant retailer Kmart, leaving the media moguls at Time Warner in her dust, and then using both Kmart and Time Warner to turn her, at least temporarily, into a Wall Street billionaire as she took her company public. It is indeed an incredible story.
With Christmas not far off, putting Martha Inc. on the shopping list might be a good idea, and not just as an after-thought gift. A Stockwatch reporter has already sent a copy to Mr. Shapray, along with the suggestion that he subsequently lend it to his stand-in, Mr. Fitterman.
Mr. Fitterman might rethink his claim of "tenuous background material" after flipping to the back of Mr. Byron's book, where he will find 40 pages of bibliographic references. Unlike many penny stock promoters and their offerings, Mr. Byron has no qualms about people taking a closer look at his work; indeed he invites the scrutiny. "Readers are invited to review the source notes for details as to where the various information came from, how it was interpreted, and why," Mr. Byron writes.
Mr. Byron is a graduate of Yale College and the Columbia University School of Law, and the latter may at least partly account for the detailed 40 pages of source notes in his latest book. It may also partly account for why Mr. Byron, in more than 30 years of hard-nosed journalism, has never before been sued for libel.
Mr. Fitterman, of course, also holds a law degree, which may partly explain his frosty letter to Red Herring on behalf of Imagis, or at least his authority to pen such a missive on behalf of a litigious client. However, it
does little to explain some of the claims in that curious chilly correspondence.
"It may be that you are already aware of and sanction Mr. Byron's new project, which we would certainly refer to at the appropriate time as further evidence of malicious intent and a personal agenda on his behalf," Mr. Fitterman continued in his letter to Red Herring. "The defamatory nature of Mr. Byron's article and Red Herring's liability for its publication can and will be resolved in the Courts of British Columbia. Imagis adheres to the belief that however Mr. Byron may perceive his role in the media, it is in the parties' best interests to restrict their litigation stratagems to that forum."
While it is not at all clear that Red Herring and Mr. Byron share that belief, they are apparently willing to play along. A notice of appearance has been filed in the B.C. Supreme Court for Red Herring and Mr. Byron and statements of defence are expected to be filed within the next week.
"The errant inquisition that Mr. Byron has now embarked upon will only complicate that process and likely prejudice your own interests, as it will necessitate a response in kind," Mr. Fitterman continued.
Stockwatch asked Mr. Shapray's stand-in to explain that statement and, in particular, what "a response in kind" meant in the context of his claim. On the face of it, Mr. Fitterman's tortured legalese appears to be a warning that Imagis, perhaps through the offices of Shapray & Cramer, will launch its own "errant inquisition" in the event that Mr. Byron continues his research. Mr. Fitterman refused to answer the question.
"In the circumstances, you may wish to raise or revisit with Mr. Byron the article(s) that he now seems intent on crafting," Mr. Fitterman advised Red Herring. "Our client reserves its rights to bring this letter as well as any unwillingness on your part to antagonistically involve the media, to the attention of the Court."
Stockwatch asked Mr. Fitterman to explain that piece of gobbledegook and, in particular, what he meant by "any unwillingness on your behalf to antagonistically involve the media." Mr. Fitterman refused to respond.
Stockwatch also asked Mr. Fitterman if he was familiar with the term "libel chill" and, if so, to offer his understanding of that term. Mr. Fitterman refused to respond. Indeed, Mr. Fitterman refused to even directly offer his refusal, sending it instead to legal counsel retained by a Stockwatch reporter after being pressed repeatedly by Mr. Shapray.
"Because we believe that your client is a material witness in the Litigation who has by his conduct demonstrated his manifest adversity to our client's position, and because he appears to be in ongoing contact and collaboration with the defendant(s) Red Herring and/or Christopher Byron, we have no desire to discuss with or explain to him strategic or other matters related to the conduct of this Litigation," Mr. Fitterman advised a reporter's lawyer. "We expect that we will advise our client to do the same."
Blaise Zerega, Red Herring's editor, offered some general remarks when contacted, but would neither confirm nor deny receiving Mr. Fitterman's frosty letter. "I will not comment on matters under litigation," Mr. Zerega told Stockwatch.
While declining specific comment regarding possible new developments, Mr. Zerega made it clear that Red Herring's position with respect to the Imagis libel suit had not changed. "Absolutely not," he informed Stockwatch. "As before, we stand fully behind the story."
Mr. Zerega was also asked for comments regarding an apparent attempt to muzzle Red Herring. "We do not comment on stories in prepublication, but you can be sure that we would neither publish nor pull any editorial coverage because of outside influence," Mr. Zerega advised Stockwatch.
While Mr. Fitterman's frosty warning to Red Herring on behalf of Imagis may not have produced much of a chill in California, where the publication is based, the market for Imagis's shares has cooled considerably since the stock hit a 52-week high of $5.66 on March 6. In TSX Venture Exchange trading on Oct. 16, Imagis closed at $1.03.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding Imagis Technologies is available in Canada Stockwatch articles published on March 7, 11, 15, 25, 27 and 28; April 2, 9 and 16; May 17, 23 and 30; June 4, 11, 18, 26 and 28; July 3, 12 and 18; Sept. 12, 13, 16, 20, 23, 24 and 27; and Oct. 2, 9 and 11, 2002.)
(c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com
KJC |
