Tuesday, December 08, 2009

Narrowstep Pursues Onstream

It's a case of the pot calling the kettle black as David McCourt and the erstwhile 'management' of what's left of Narrowstep seek damages regarding the deal they did in 2008 with fellow online TV company, Onstream. This filing from Onstream a couple of days ago:

"On April 22, 2009 we filed a report on Form 8-K with respect to Narrowstep's issuance of a press release on April 16, 2009 announcing that it was seeking $14 million and other damages from us, as a result of our alleged actions in connection with the termination of the agreement to acquire Narrowstep. This demand was made in the form of a letter issued at about the same time by Narrowstep's counsel.

As disclosed in that report on Form 8-K, after reviewing the demand letter issued by Narrowstep's counsel, we determined that Narrowstep had no basis in fact or in law for any claim.

On December 1, 2009, Narrowstep filed a complaint against us in the Court of Chancery of the State of Delaware, alleging breach of contract, fraud and three additional counts related to our alleged actions in connection with the termination of the agreement to acquire Narrowstep and seeking (i) $14 million in damages, (ii) reimbursement of an unspecified amount for all of its costs associated with the negotiation and drafting of the merger agreement, including but not limited to attorney and consulting fees, (iii) the return of Narrowstep's equipment alleged to be in our possession, (iv) reimbursement of an unspecified amount for all of its attorneys fees, costs and interest associated with this action and (v) any further relief determined as fair by the court.

After reviewing the complaint document, we have again determined that Narrowstep has no basis in fact or in law for any claim and accordingly, we do not expect the ultimate resolution of this matter to have a material impact on our financial position or results of operations."

Now, considering that I was a major shareholder in Narrowstep at the time of the deal, I, nor to my understanding, any other shareholder, was a) informed of the deal apart in filings; b) had an opportunity to vote on the deal; c) had the opportunity to raise the issue at an Annual Meeting since the company did not hold an Annual Meeting. I understand that there might be legal proceedings afoot from many of the company's shareholders regarding the above shortcomings.

People who live in glass houses should be wary of throwing stones...