DoubleClick Inc. and MaxWorldwide Inc. exchanged letters last week informing each other of the intent to file legal claims resulting from last year's sale of DoubleClick's online media business to MaxWorldwide.
DoubleClick sold its North American media business to MaxWorldwide for 4.8 million shares, $5 million in cash and the promise of another $6 million if performance conditions were met.
“On July 9, 2003, DoubleClick sent MaxWorldwide a letter which preserves DoubleClick's right to take all appropriate action, including filing a lawsuit, against MaxWorldwide for certain breaches under the purchase agreement relating to MaxWorldwide's purchase of DoubleClick's North American media business in July 2002,” a DoubleClick spokesperson said.
MaxWorldwide responded in a Form 8-K filed with the Securities and Exchange Commission on July 10 that said in part, “The Registrant intends to pursue legal claims against DoubleClick under the indemnification provisions of the Merger Agreement, and reserves the right to pursue legal claims outside of the Merger Agreement, which relate to the sale of DoubleClick's online media business.”
The filing further stated that DoubleClick would seek damages of at least $10 million and that MaxWorldwide would file claims for no less than $6.5 million.
Neither firm would elaborate on these statements.
However, in March, MaxWorldwide announced the pending sale of its online marketing division MaxOnline to Focus Interactive, Irvington, NY, which owns and operates the Excite, iWon and My Way Web sites.
Though the up to $6 million sale was subject to shareholder approval and was expected to close within 90 days of March, MaxWorldwide general counsel Peter M. Huie said it now was set to close by the end of this month.
In February, MaxWorldwide sold its MaxDirect data management division to list brokerage and management firm American List Counsel, Princeton, NJ. MaxDirect, Valhalla, NY, had been Novus List Marketing prior to being sold to L90 Inc. in May 2001.
At the time of the sale, MaxWorldwide president/CEO Mitchell Cannold said that the firm was left with its MaxOnline and MaxCreative divisions, adding that the online division was profitable. Therefore, if the sale of MaxOnline were completed, MaxWorldwide would consist solely of MaxCreative.
MaxWorldwide was delisted from Nasdaq last August after failing to file its quarterly report on time. Its stock was trading at 64 cents Friday.
Both DoubleClick and MaxWorldwide are headquartered in New York.