Complaint alleges CEO and board members have neglected their duties.
In what is the latest in the continuing saga of Live Current Media, its former CEO and other plaintiffs have filed a lawsuit (pdf) against current CEO Geoffrey Hampson and each of the company’s board members. The lawsuit was filed in the Circuit Court of Cook County, Illinois in the Chancery Division.
The suit goes after Hampson for alleged fraud, breach of contract, breach of fiduciary duties, and unjust enrichment. Its claim against the board is for breach of fiduciary duties through gross mismanagement, waste of corporate assets, and misappropriation of corporate opportunities. The suit alleges that the three board members are all either friends or business associates of Hampson.
Live Current Media owns and operates a number of category-killer domain names, such as Perfume.com, but has sold many of its domains over the past two years to raise money.
At the crux of the complaint is that Hampson did not devote all of his time to running Live Current Media, despite alleged assurances to outgoing CEO David Jeffs that he would do so. Jeffs had grown the company to over $9 million in revenue in 2007 when he brought in Hampson to run the business.
The complaint alleges that just three months after signing his employment contract with Live Current, Hampson formed another company called CoreLink Data Services, LLC. It alleges that Hampson has spent “substantial amounts of his time and Live Current’s resources traveling for and working to build up CoreLink”.
The plaintiffs point out several questionable decisions by Hampson:
-directing the company to pay a bonus of $1 million to Jonathan Ehrlrich to become president of the company in 2007
-hiring his girlfriend (who the plaintiffs say had little or no internet experience) to run Perfume.com, the only division of the company that was earning a profit at the time of her hiring
-causing the company to spend money to move its headquarters to Chicago so that it would be nearer CoreLink’s headquarters.
The complaint also cites a couple “disastrous” decisions by Hampson, including:
–Acquiring Auctomatic for $5 million
–Signing a deal requiring the company to pay $50 million over ten years to Indian Premier League
The complaint says that Since Hampson joined the company the market cap has dwindled from $46 million to just $1.8 million today.
The plaintiffs want at least $50 million in damages.
On May 21 Live Current Media filed with the SEC to sell more shares in the company. Its filing mentions the lawsuit, but says none of the parties have been served.
jack ford says
need some popcorn for this one.
steve says
This guy sounds like a genius.
I have left every company I have been to because they were led by morons. It is the same sad story everywhere. But they hired him.
You bring in a loser and you will have no money very soon.
To lose 45 million, that is hard to do.
Josh says
Just wow! The question is, did he not need a board approval for each decision? If so I may change my reply to 12 wows lol
jack ford says
I would of just invest $50mill into perfume.com.
brian k says
I dont get it
Why do they need to pay to become a content provider. I get paid to provide content.
Am I missing something?
Is cricket that big?
Andrew Allemann says
@ brian k – it was a deal that allowed them to stream the video and be the ‘official site’ for IPL I believe, kind of like getting a deal for Major League Baseball. But still, it clearly didn’t make sense — especially b/c the company didn’t know anything about cricket.
David J Castello says
As someone who knows something about developing generic names I have to tip my hat to David Jeffs for generating $9 million in 2007. I had no idea he was doing that well and it is absolutely heartbreaking to read what Geoffrey Hampson did to his company. My only questions is why did he bring him in? Jeffs had to know that what he accomplished is not easily duplicated or directed. There is no way that Michael and I would hand the helm to someone else unless we were paid so much money that we’d still come out ahead even if they drove the company onto a reef.
Snoopy says
Under the old management the company frequently reported losses, it has been badly managed for a very long time. Hampson simply made the ship sink quicker than otherwise.
event hire says
i just did my tax return and it made me feel better about myself lol
this guy has the business acumen of george w bush lol
were the other partners actually, ‘sleeping’ partners. i mean literally!
pass the popcorn biotches! lol
S. Robertson says
To #8, the company was not sinking under the prior management. They had money in the bank, a growing perfume business and tons of great domains. Most importantly, they were not hemorrhaging money and did not negotiate horrible, expensively dangerous agreements, such as the Automatic or Indian cricket deal, which almost bankrupted the company. Hampson has resorted to flogging off the domains to pay for his terrible business decisions.
If you read the company’s latest quarter, their perfume sales were down 45%.
Tim says
Yeah….this is what you get most often when you hire an “expert” to take the helm.
A kid could have made better decisions than this guy, it would seem on the surface.
Ed Muller says
This is living proof that being granted with a gift does not grant you with the ability to manage it. These guys should have sold their behemoth long ago and retired to a private island where they could act like idiots without destroying wealth.
Snoopy says
///////////To #8, the company was not sinking under the prior management. They had money in the bank, a growing perfume business and tons of great domains………….Hampson has resorted to flogging off the domains to pay for his terrible business decisions. /////
Here is their financial results over a number of years (under the old management)
Net Profit
December 31, 2003 $249,793 (includes 280k profit from selling off domains)
December 31, 2004 $498,097 (includes 600k profit from selling off domains)
December 31, 2005 $346,975 (150k of which was from writing off some accounts payable, no domain sales)
December 31, 2006 $414,437 (inlcudes 250k royalty settlement and 430k profit from selling off domain name)
As you can see from the above this company has never really made money from doing business aside from the year 2005 where they made about 200k. All they have done is sell off domain names (ironically that contuines under the new management but at a much faster pace) and played around with some accounting numbers. So for the old management to claim they have built this business up is not accurate, it has been in decline for a long time. Hampson has made the situation alot worse but they way they were going it would not have lasted anyway.
The real work was done by the founder in 1994.
arai_ sun says
Snoopy said, “So for the old management to claim they have built this business up is not accurate, it has been in decline for a long time.”
What company are you talking about? Prior management grew perfume revenue from 0 – 8M in 4 years. In what world is that a decline?
Snoopy says
Snoopy said, “So for the old management to claim they have built this business up is not accurate, it has been in decline for a long time.”
What company are you talking about? Prior management grew perfume revenue from 0 – 8M in 4 years. In what world is that a decline?
/////////////////////////////
They grew that revenue on the back of losses every single year except one, the only thing really propping the company up has been selling off domains. Eventually the cash will run out regardless of how much their revenue has grown by.
Scott says
I once owned this stock but sold years ago before this idiot came in. Every penny this hampson and his gf have should be given back to the company. What a scum. He ruined a company like Obama is trying to ruin a country. Hampson is a tiny socialist spreading shareholder wealth to his cronies just like the gov’t.
Snoopy says
Every penny this hampson and his gf have should be given back to the company.
//////////////
I think he has actually lost alot of money in the company himself. He invested a couple of million I believe and deferred all salary about a year ago,
“To this end, the Company further announces that CEO, Geoff Hampson, has agreed to defer all salary and other compensation indefinitely. The length of such deferral will be solely at the discretion of Mr. Hampson and the Board of Directors.”
I think the way the lawsuit has has suggested he has lined his own pockets isn’t accurate. He has perhaps lost more than anyone else from all this. This is purely a case of bad management in my view, from prior and current management.
Randolph says
I read through this lawsuit & it does not make much sense. You cannot sue someone for being a bad manager, especially when you are the person who hand picked & hired him.
From what I gather, Hampson has put in millions of dollars of his own money to purchase LIVC stock, as well as continuing to purchase more, dating back to a just few days ago when he purchase another 80,000 shares. This, & the fact that he has never sold a single share & deferred his salary is proof enough that he was not out to enrich his own pockets. He may, oh let’s just say it, he is a poor CEO, but you cannot sue someone for this.
Food for thought, Jeffs, the old CEO has been contacting old shareholders asking for their vote to replace Hampson to get his old job back. He has also been unemployed since he left LIVC years ago. I suppose CEO jobs are hard to come by. Could this be a way for Jeffs to get his old job back & the nice salary it comes with it? We’ll see what the judge says. What a mess!!!
S. Robertson says
Corelink’s website and press releases state that Hampson is the CEO and founder and that they were started in 2007, when he also took over as CEO of Live Current.
http://www.corelink.com/aboutus-management.htm
http://www.corelink.com/aboutus.htm
Hampson’s salary deferment that someone mentioned above was temporary and he is being paid quite handsomely. Read their latest annual report.
LIVC says
I got an e-mail out of the blue from David Jeffs, the previous CEO stating that he would like my vote in taking back the company. This is very strange since not only am I not a major shareholder, but I have never had any previous correspondence with him. My e-mail was on their old mailing list, so perhaps that is where he got the info.
I fired back a response asking how he was going to turn around the company since it is a totally different animal since he left, with a lot of the domains sold off & what his business plans were. I receive no response. I sent this to him twice & no response either time.
Perhaps this was a mass e-mail that was sent out to all shareholders, but one would think that the CEO would respond to such a question if he wanted anyone to vote in his favor.
arai_sun says
At this point almost anyone would probably be better for LIVC than Hampson.
Indian Cricket fiasco…buying Automatic for millions (and getting nothing in return)…massive expenses and management fees ($1 million bonus to Ehrlich)..and best of all, breaching his contract by founding and focusing on building another company to the detriment of LIVC.
Randolph says
I agree that Hampson may not be the best man for the job & he most probably let Enrich run loose & do as he pleased, to dyre consequences.
However, Jeffs is not the man for the job either. He could not take the company any further when it was sitting on all those prime domains with money in the bank. That is why he stepped down.
After 2 years of unemployment he wants his job back. What exactly can he do now to a damaged company that he couldn’t do to a healthy one before? The nice salary, benefits & stock option are mighty tempting to any unemployed CEO.
Also, take a look at the lawsuit. The people suing him are David Jeffs & his father Rick Jeffs. Anyone familiar with Rick Jeffs business practice will run as far away from him as possible. If he gets on the inside with LIVC, he’ll make Hampsom look like Warren Buffet.
Bag Holder says
I have been a shareholder for over 5 years, and in a nutshell here is what has transpired under Hampson’s “leadership” since 2007:
My shares are worth 90% less, the company has accumulated losses of $20M and has unloaded about half of their top domains to fund overly exorbitant management fees and expenses – including his girlfriend’s.
If his track record is any indication, he will completely destroy this company if he remains in control. And the icing on the cake is that he has been spending his time on corelink while cleaning out the coffers of LIVC. What a farce.
Snoopy says
My shares are worth 90% less, the company has accumulated losses of $20M and has unloaded about half of their top domains to fund overly exorbitant management fees and expenses – including his girlfriend’s.
If his track record is any indication, he will completely destroy this company if he remains in control. And the icing on the cake is that he has been spending his time on corelink while cleaning out the coffers of LIVC. What a farce.
//////////////////////////
You can look at the financial reports and see this isn’t really true. Hampson has put far more money in than has been taken out in his and his girlfriends wages. He is a big loser from this.
In *hindsight* alot of bad decisions were made by management. But shareholders backed him, when he was brought in the share price rose very strongly based on his track record of success. I don’t recall anyone calling him an idiot when he did these deals.
As far as him destoying the company if he stays in personally I think this company won’t survive whether it is Hampson or Jeffs running it. The current battle for control is between two bad managers in my view.
Randolph says
I know it’s fashionable to join the Geoff Hampson hate club, but he’s put in millions of dollars of his own money into LIVC & been paid about $500,000 in salary.
He took the stock to almost $3.50 & has never sold a share. He is a much bigger loser in this ordeal than anyone cares to mention. No one was compalining then, including the Jeffs who made a pretty penny flogging their shares. Hell, I made some good coin at that time as well.
Now, take a look at the lawsuit twins of David & Rick Jeffs. David Jeffs has been unemployed since he left LIVC & living in Europe as his father Rick does. Rick is notorious for stock plays that line his own pockets & no one else’s & was embroiled in a boiler room scam in British Colombia. Just look him up on the net & you’ll see what kind of ‘business man’ & reputation he has.
The Jeffs see a weaken company & put up the bogus $50 million lawsuit to get Geoff Hampson to step down so they can take over. I can guarantee you they will put their own money in & get options for pennies. Since LIVC can be back up to 30-40 cents in a heart beat, they will blow their shares out & then move along.
What can David Jeffs do for a weakened damaged company now that he couldn’t do for a healthy profitable one before? The Jeffs see a golden oppurtunity, imo, are out to line their pockets.
Now, I don’t think Hampson is the perfect person for the job either. I’d like to see a tech savvy person with financial & industry connections take over. However, since that is not an option, imo, Hampson is the lesser of two evils.
Bag Holder says
“Our move into the Midwest comes at a good time, when demand for co-location remains very strong and supply is limited”…
“This is particularly true for the Chicago market, where we are committed to making a large investment into this new facility, which will be our largest yet.”
In anyone is confused, this quote is from Hampson, and he’s talking about Corelink, not Live Current. As I said in my first post, what a farce.
Mark J says
I think at this point the best value for shareholders would be to liquidate and return capital
http://webvalueinvestor.com/domaining/live-current-should-liquidate-and-return-capital-to-shareholders/
US Investigator says
I am looking to speak with people who konw the truth about real ownership of this stock and what communictaion occurred leading up to the proxy take over.