Moniker founder files suit against acquirer.
[Story updated with Moniker statement at end.] Moniker founder Monte Cahn has sued Oversee.net along with its current CEO Jeff Kupietzky and founder Lawrence Ng over a $13 million inventive plan.
Cahn sold his Moniker domain name registrar and related businesses to Seevast in 2005. In 2007 Oversee.net approached Seevast and Moniker about buying the business, according to the complaint. It agreed to a purchase price of $35 million, but allegedly said it would not purchase the business without Cahn committing to join Oversee.net for at least three years.
The suit says that Oversee.net offered a Management Incentive Plan (MIP) for up to $13 million for Cahn to join the company. Cahn would also receive 300k shares in Oversee.net, $250k base salary, a signing bonus of $75k, yearly retention bonus of $75k, and other incentives including participation in an equity incentive plan.
Cahn was originally to serve as president of Moniker, according to the suit. The role changed over time to include running SnapNames and DomainSponsor, yet Cahn says the incentive plan wasn’t adjusted even though he was no longer working exclusively on Moniker.
After leaving the company in December, Cahn says he wasn’t paid any of the $13 million in the incentive plan. The suit says:
Cahn is informed and believes, and on the basis of such information and belief alleges that Oversee improperly interfered with his ability to attain his goals pursuant to the MIP, and thereby interfered with his ability to receive his bonuses under the MIP by, amongst other things, improperly diverting substantial revenues and profits from Moniker to other subsidiaries of Oversee; reducing his staff by more than 33%; and improperly and incorrectly reporting Moniker’s Selling, General, & Administrative Expenses.
The suite also alleges that Oversee.net agreed to pay Cahn 50% of its commission for the sale of Restaurants.com, which closed in February 2011, but has failed to do so.
Cahn is suing the defendants for breach of contract, intentional misrepresentation, negligent misrepresentation, unfair competition, among others.
You can read the entire complaint here.
Oversee has issued the following statement regarding the lawsuit:
Predictably, the path Monte Cahn has chosen is needlessly confrontational and provocative. Regrettably, his perceived dispute with Oversee is a result of his own falling short of expectations. This action will do nothing to further his cause and will only result in the needless expense of time and attorneys fees. It is unfortunate that Monte’s actions will impact employees and clients of Moniker, the company he helped found.
Monte’s unfounded claims are well overstated and singularly without merit. We will vigorously defend this action and we look forward to resolving this in court at the earliest possible opportunity.