FutureLink Is Sued by N.Y. Investment Bank
FutureLink Corp., an Irvine-based provider of Internet programs for small- and medium-size businesses, is being sued for $110 million by an investment bank that claims it hasn’t been paid for its services.
SmallCaps Online Group LLC, a New York firm that advises small health care and information technology companies, claims that it is owed cash and warrants for helping FutureLink obtain financing for acquisitions through two other investment banks, Commonwealth Associates and Gerard Klauer Mattison & Co.
In the suit, which was filed Wednesday in New York state Supreme Court in Manhattan, SmallCaps--formerly known as Bridge Technology Group--says it “identified and approached” Commonwealth and GKM for FutureLink.
FutureLink Chief Executive Philip Ladouceur said the deals occurred before he joined the company but his understanding was that SmallCaps had played no role in helping obtain the funds.
“The only thing I understand from counsel is it’s a frivolous lawsuit without merit,” he said.
FutureLink provides clients with off-site, Internet-based computing services, saving them from having to install and upgrade applications on employees’ PCs.
The company’s stock began trading on the Nasdaq National Market early this month after climbing steeply in over-the-counter trading. The stock was valued at as little as $1.30 last April. It closed at $27.50 Thursday, up $1.
The stock’s rise has been fueled by a series of acquisitions made in the last five months.
In September, FutureLink paid $33 million in stock and cash to acquire two firms, both computing integrators.
The company made two more additions last month: KNS Holding Ltd., a British firm that is the largest distributor of Citrix Systems software outside the United States, and VSI Technology Solutions, a Beltsville, Md.-based reseller of Citrix server software.
