May 17, 2013

Disgruntled Employees Sue ePrize

In 2005 there was some financial rigamarole at ePrize that resulted in a lot of the employees having to sell their stock options. You could sell all or some of your options. Being a loyal employee, I didn't want ePrize to expend any more than they had to so I sold the minimum.

Shortly after being fired from ePrize I received a call from Robb Lippitt telling me that there was a screw up in the paperwork and that I had to pay taxes on my profits from the sale. 50% of the amount netted was due! Rather than paying, I've been allowing the interest from the amount in escrow.

Every year since then I've gotten a statement saying that I was just a little closer to paying off that insane tax bill and claiming the net of what I sold.

This year, however, I got a very strange email. Rather than my usual statement I got a cryptic email that talked about all of ePrize's stock being sold off and that I'd get a payout but that there could be another huge amount taken out in taxes.

I hadn't heard about ePrize being sold last August. Despite being a stock holder, I guess I don't need to know these things. According to Xconomy, "the company’s backers, including Quicken Loans' Dan Gilbert, scored a healthy return on their investments."

However, those healthy returns don't seem to be "trickling down" to those who hold stock options in the company. Instead, we seem to be getting the shit end of the stick. I just read that there's a lawsuit against ePrize by my fellow disgruntled employees.

According to Crains:

Suing are former ePrize Executive Vice President of Business Development Ivan Frank, former Senior Vice President of Production Jeffrey Dwoskin, former Senior Vice President of Product Development Phil Jacokes, former associate creative director James Brunk, former controller Blake Atler, former sales associate Matt Kovaleski, Roy Krauthammer and Frank's investment company, IJF Holdings LLC.

Most worked at ePrize more than four years ago, according to employment histories at LinkedIn. The lawsuit alleges they each owned shares of ePrize and received nothing for them in the sale, though the company allegedly issued recent Schedule K-1 statements to them for tax purposes, indicating they'd received a distribution from the sale.

The lawsuit seeks unspecified damages above $25,000, along with a full accounting of the sale transaction plus attorney fees and "recoupment of all sums ill-gotten" by ePrize and the other defendants.

Linkner and Hermelin said in a statement: "There is zero merit to the claims made by these former ePrize employees, most of whom are disgruntled about being terminated years ago. The sale of ePrize was completed according to the letter of the law. We intend to fight this frivolous suit with all available resources afforded under the law."

Meanwhile, Dan Gilbert doesn't seem to be taking the lawsuit well. In The Detroit Free Press he's quoted as saying:

"This is a just a frivolous lawsuit by disgruntled ex-employees who are trying to take a shot and hoping somebody writes a check to them and goes away," Gilbert said in an interview. "It's not going to happen because we never settle, ever, if we're right."

"I don't think it's news," he added. "Lawsuits get filed all the time."

I'm going to call on Monday to see if I can take part in this suit. Wish me luck.

3 comments:

Anonymous said...

Looks like the evil empire has (at least initially) won: http://www.crainsdetroit.com/article/20131009/NEWS/131009842/

Anonymous said...

Ugh. I'm very sorry to hear that they weren't successful in this first round.

Anonymous said...

I love that the dismissal reasoning is "oh we screwed you over years ago and you didn't notice. HAHAHA"