Wednesday, August 8, 2001

Auctioneer sues
WorldPoint over

The creditors also are named
as defendants in a bid to have the
parties resolve their differences

By Tim Ruel

THE PECULIAR SAGA of former high-tech company WorldPoint Interactive Inc. has taken a new legal twist, with an auction company suing ostensibly to protect the state of Hawaii from being duped.

Mark Glen Auctions, hired to sell WorldPoint's assets last month, has sued WorldPoint and several of the tech firm's creditors, including the state.

The suit was filed last week in First Circuit Court, primarily as a defensive maneuver, after the auction turned up less than $100,000 after expenses.

The auction was originally advertised as offering $1.5 million worth of equipment and office supplies. According to WorldPoint CEO Massimo Fuchs, the auction was expected to net about $500,000.

The state sued WorldPoint in June to collect $810,000 from a government loan that went overdue five years ago. Another firm, Tropical Water Features Inc., sued WorldPoint last month to get payment for five water fountains it sold to furnish WorldPoint's former offices on Bishop Street. The custom-designed fountains cost $10,000 apiece.

The state and Tropical Water have been vying with WorldPoint's own legal counsel -- bankruptcy firm Wagner Choi & Evers -- to make a claim to the proceeds of the auction, according to the auction firm's suit.

The suit charges WorldPoint, a Delaware corporation, with trying to hide assets from the creditors. The company recently closed its offices at the penthouse of 1132 Bishop St., owing nearly $30,000 in back rent.

Mark Glen said he sued to clear up ownership of equipment that was removed shortly before the auction took place. Glen is seeking to have WorldPoint and its creditors settle the matter without coming to him for money, according to the suit.

Fuchs accuses Glen of running up his commission for holding the auction, then creating a mess by filing the lawsuit. The auction firm took a 20 percent commission on the items that were removed by Fuchs and never sold. In total, it took $72,503 for its expenses, cutting the auction proceeds nearly in half.

Fuchs claims Glen removed nearly $50,000 worth of equipment and had it stored under lock at Royal Hawaiian Movers. "He did all that without our approval," Fuchs said.

In WorldPoint's contract with the auction firm, Fuchs had the option of removing equipment from the sale by giving written notice by the Thursday morning before the Saturday auction took place. Fuchs said he gave the auction a company a list on Thursday, in keeping with the agreement. WorldPoint needed the equipment to continue doing business, Fuchs said.

Fuchs removed nearly $100,000 worth of equipment before the auction to his residence and elsewhere, according to the bill sent to WorldPoint from the auction firm.

The other equipment remains with Royal Hawaiian Movers. It is as yet unclear exactly what went where.

In the end, office furniture and supplies comprised the bulk of the auction items, with most of the company's high tech equipment unavailable to bidders.

Mark Glen maintains that he stuck to the terms of the six-page contract. He declined further comment.

Fuchs has similarly hammered at the state over its lawsuit -- charging the Attorney General's Office with harming WorldPoint's ability to do business.

For the past five years, the state had attempted to convert WorldPoint's outstanding loan into an equity stake, but changed its mind after the market for technology issues tanked, reducing the value of the company. WorldPoint was in the business of translating Web sites into different languages for business. Earlier this year, WorldPoint fired 100 employees and began closing its outside offices. Fuchs has until the end of this month to respond to the state's suit or reach a settlement.

Meanwhile, WorldPoint has other legal battles to contend with. As previously reported by the Star-Bulletin, Fuchs is in a rent dispute with the landlord of his million-dollar beachfront residence in Aina Haina.

The landlord -- a Japanese businessman who is WorldPoint's largest investor -- sued Fuchs for back rent. Fuchs has countersued, claiming the landlord owes him money for a separate lease agreement. Fuchs, a native Swiss banker, also claims the landlord committed defamation by accusing Fuchs of hiding WorldPoint's assets in Swiss bank accounts.

Fuchs is preparing to move out of the stately home in the next couple weeks.

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