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November 15th, 2008 | by argentiumsterlingsilverexperiences |Motricity Saga Continues: Company Sues Former Top Executive
when steve elfman, one of motricity’s highest-ranking executives, left to link sprint nextel earlier this year, it appeared to be a worthless momentous for motricity, which had just paid $135 million for elfman’s company, infospace mobile. but in an evaluate with us a couple months later, motricity’s ceo ryan wuerch sounded upbeat, and suggested some potential upsides to his departure: “he’s the president at sprint (nyse: s), which is a customer.” sprint was never a good customer, instantly? “no, it was at no time a good infospace (nsdq: insp) customer, but for motricity it has been a customer notwithstanding awhile.”
Well, that optimism apparently vanished quickly: Just two days after the interview appeared in mocoNews, Motricity sued Elfman, according to the Kansas City Business Journal. The suit alleges that Elfman knew Motricity would only buy the InfoSpace mobile business if he committed to take the job of president and COO and stay for two years after the sale closed.
It’s the latest drama for Motricity, whose fortunes and set-backs are intensely followed in the wireless industry. When the company purchased InfoSpace’s mobile division, it moved to Bellevue and laid-off hundreds of employees who had worked at its headquarters in Raleigh, N.C. The company, which develops back-end infrastructure for wireless operators, such as AT&T (NYSE: T), has raised nearly $500 million to date, including money from investor activist Carl Icahn.
The suit, filed on July 16 in Superior Court of Washington for King County, alleges that Elfman’s “duplicitous conduct” enriched himself and damaged Motricity. The Motricity-InfoSpace deal closed on Dec. 28., and Elfman left about three months later to become Sprint’s president of network operations and wholesale. The Overland Park, Kan.-based Sprint said in a SEC filing last week that it had agreed on Aug. 4 to pay Elfman’s legal expenses in the case “to help mitigate distractions to the business and to protect (Sprint’s) interests.” Sprint told the Kansas City Business Journal that the company “reviewed the allegations, and Steve continues to have our full support.” Motricity’s general counsel said he was not allowed to comment. The suit seeks monetary penalties against Elfman “in an amount to be proven at trial.”
History of the Motricity-Infospace saga in our section
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