New Ammo For Idealab's Angry Investors

from the questionable-procedures dept

We've followed the Idealab shareholder lawsuit for some time now, while I was never a fan of Idealab, I think the lawsuit goes a bit too far. This is really sour grapes from a group of amazingly greedy investors who didn't do any due diligence and thought they were getting free money. However, now they're saying they've got some new ammunition against Bill Gross and his wife, Marcia Goodstein. This includes an email that Goodstein sent Gross right after they raised the $1 billion that's being contested. In it, Goodstein writes, "we are running out of cash. At your current deal rate, we're not running, we're hemmorrhage [sic], I can't even think of words strong enough to express how fast we are going broke." They've also turned up the fact that Gross defaulted on a $50 million personal loan, and needs to keep the company running in order to pay that off without declaring personal bankruptcy. They also suggest that's the reason Gross has seen his salary triple to $766,000 over the past two years, despite the fact that Idealab has pretty much collapsed during that time. Goodstein says the salary increases were because they "successfully restructured the company". Of course, the only reason it needed to be restructured was that they had screwed up managing it in the first place. That's like rewarding a kid for cleaning up the mess he made. All in all, this seems like a deal where both sides were being greedy and deserve to lose. In the end, as Idealab slips further and further into trouble, the one redeeming factor is that all of them lost money on this deal.