Tech firm sues CEO
Austin Business Journal - by Shannon Rentner Austin Business Journal Staff
Austin-based software company WebTaggers Inc. claims former CEO David Chevalier diverted $50,000 of the $500,000 paid by Vignette Corp. for the company's intellectual property into his personal bank account.
Chevalier negotiated the asset sale on behalf of WebTaggers, according to a lawsuit filed May 16 in Travis County District Court. Under the final Dec. 8 agreement, Vignette would buy all of WebTaggers' intellectual property and related assets for $500,000 to be paid in four installments.
Chevalier supplied Vignette with specific wire transfer instructions for the first two payments, according to the suit. On Dec. 22 -- following those instructions -- Vignette wired $125,000 of the first installment of $150,000 into WebTaggers' account and $25,000 into the personal account of Chevalier, according to the suit.
On Jan. 19, at Chevalier's direction, Vignette transferred $75,000 of the $100,000 second payment into WebTaggers' account and $25,000 into Chevalier's own account, according to the suit.
An affidavit signed by Bryce Johnson, Vignette's senior vice president and general counsel, states it was made clear to him that all the payments were supposed to go to WebTaggers. Johnson negotiated the deal for his company. Johnson wasn't aware at the time that part of the installments allegedly were diverted into Chevalier's personal account, according to the affidavit.
According to an affidavit from WebTaggers' attorney, Douglas Stum of Austin-based Diamond McCarthy Taylor & Finley LLP, Chevalier admitted he didn't receive corporate authority to divert the funds into his personal account. Stum declined to comment.
Chevalier has relocated to Georgia, according to the suit. Chevalier couldn't be reached for comment.
WebTaggers is seeking to garnish Chevalier's bank account at Bank of America NA in Georgia to collect the allegedly diverted funds.
Maury Lane, a spokesman for e-commerce software developer Vignette, says his company already has the intellectual property and related assets of WebTaggers.
"We have signed a contract purchasing the assets of WebTaggers in order to continue to integrate them into our products," Lane says.
Lane declined to comment on the suit.
WebTaggers received about $1 million in funding from AV Labs shortly after it was founded in July 1999. Although it later secured about $5 million from AV Labs and Techxas Ventures, the company failed to reach its goal of $6.5 million. WebTaggers shut down last November.
The role Chevalier played in the transaction seems to deviate from the way similar transactions are done, says Ted Sipaseuth, senior research analyst with Los Angeles-based research firm Mergerstat.
"The final decision comes down to the CEO and board, but I've never heard of a CEO directly facilitating a deal between two companies," Sipaseuth says. "It's usually facilitated through the company's financial backer, its financial staff and its board of directors."
Chevalier was CEO of WebTaggers from April 2000 until the end of last year.
WebTaggers was founded by Sean McCullough, who was chief technology officer; his brother, Craig, who was chief financial officer; and Rudy Rouhana, who was vice president of strategic development. WebTaggers' software tracks consumer behavior on the Web, enabling online merchants to target consumers as they visit e-commerce sites.
[Travis County District Court, Cause Nos. GN1-01486, GN1-01489.]
SHANNON RENTNER can be reached by email at (srentner@bizjournals.com).
Latest News |
