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05|14|2009 06:41 am EDT

Thought Convergence sues Jay Westerdal

by Frank Michlick in Categories: News

Yesterday DNN received an email from Jay Westerdal saying that he was let go by Thought Convergence and they still owe one of his holding companies money. The email can be found after the jump.

Later at the end of the day Thought Convergence issued a statement as well, which can also be found after the jump. The company states that the termination is not related to the pending dispute about last year’s purchase of Name Intelligence, LLC. Domain Name Wire later revealed  a pending lawsuit from TCI against Jay Westerdal, his father Per Westerdal, Ray Bero and Cameron Jones. The suit is for alleged breach of securities exchange agreement, breach of employment and non-compete agreements, breach of fiduciary duty, breach of covenant of good faith and fair dealing, and accounting.

The suit also seeks an injunction to stop Jay from continuing his work with the DotMovie TLD project, which according to TCI violates their non-compete agreement.

Email from Jay Westerdal

Hello Friends,
I wanted to let you know that my email address <email address removed> no longer works and that you should not email me there. If you want to email me from now on, please contact me at <email address removed>. You can also reach me on my cell phone at <cell number removed>. I am no longer with Name Intelligence, LLC (The company Thought Convergence purchase May 2nd 2008). But I remain President of Name Intelligence, Inc. a holding company which is still owed money from Thought Convergence.

I have been officially been terminated from Though Convergence as of this afternoon.

Regards,
Jay

Statement by Thought Convergence

While we believe that employment matters should be dealt with internally rather than in a public discourse, we feel compelled to address the misstatements by Jay Westerdal that were quoted today on various public forums. Thought Convergence confirms that Jay Westerdal is no longer an employee or an officer of Thought Convergence, Inc. or any of its subsidiaries. The Company will not comment on the reasons for Mr. Westerdal’s termination, other than to state that Mr. Westerdal’s dismissal is not related to a dispute with respect to Thought Convergence’s acquisition of Name Intelligence in 2008.

Specifically addressing Mr. Westerdal’s commentary on our financial condition, Thought Convergence is a healthy, profitable and vibrant company, and despite these challenging economic times, we continue to grow and innovate in all of our business lines, including TrafficZ, DomainTools, Spry Hosting and Aftermarket.com. Thought Convergence has and will continue to faithfully perform its obligations under the terms of the acquisition agreement. A majority of the payment due has already been made to Name Intelligence, with the remainder being held in an escrow account at the Company’s outside counsel, pending resolution of the Company’s various claims against Name Intelligence and Mr. Westerdal.

Finally, Thought Convergence has not waivered from our vision of developing the industry’s first symbiotic Domain Ecosystem. We consider DomainTools and Spry Hosting to be integral parts of our ongoing strategy, and, as such, we will continue to invest heavily in the further development and innovation of these unique assets.

The beginning of the lawsuit document as first published by DNW.

This case concerns a blatant breach of contract by the sellers of an internet business to TCI, the breach of an employment agreement and noncompete agreement by one of the sellers’ principals, Jay Westerdal, and Mr. Westerdal’s breach of fiduciary duties owed to Plaintiffs. Despite Mr. Westerdal’s assurances that his business was set for immediate and explosive growth and that Mr. Westerdal would commit his full business effort to running the business after its acquisition, neither proved to be true. Rather, Mr. Westerdal materially misrepresented and omitted key information about the condition and nature of his business to extract a hyperinflated purchase price. Following the acquisition, Mr. Westerdal failed to assist the business in any meaningful way, used company assets as his own personal bank account, and began developing a competing business in violation of his duties and contractual obligations to plaintiffs…

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2 Comments

KingRadical

May 14, 2009 @ 9:39 pm EDT

Jay deserves everything he’s getting right now.

Patricia Kaehler

May 17, 2009 @ 4:50 am EDT

I hope everyone can get things squared away…

Everyone just do the “Right Thing” and all will be okay…

Patricia the Optimist…

~Patricia Kaehler

.

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