Digital advertising company Dotomi is back in the news, and not in a flattering way, two years after it was acquired by ValueClick Inc. (Nasdaq: VCLK) for $295 million. Former employees have sued the company and its founders for allegedly not paying them their share of the sale proceeds.
Dotomi's founder, serial entrepreneur Yair Goldfinger, made $68 million on the sale, and some other executives also made hefty, albeit much smaller, sums. Dotomi was Goldfinger's third exit in 2011, and ninth overall. His first exit was the acquisition of ICQ developer Mirabilis by AOL for $407 million in 1996.
In May, five people who were among Dotomi's first employees sued the company and its founders, Goldfinger, Eyal Schiff, and Tamir Koch. The statement of claim states, "When the claimants' employment at the venture was terminated, it was never agreed with them in any way that they waived their rights in the venture, and in any case they were never paid in exchange for such a waiver." It adds, "The claimants accepted the respondents' promises that their rights would be protected and that the rights would be protected and exercised as promised them by the officeholders in the venture, which in retrospect never happened."
Chicago-based Dotomi was founded in 2000 and raised $17 million from Globespan, US Venture Partners, Velocity Equity Partners, and its founders. It had $80 million in sales before its sale in August 2011, and 160 employees.
On March 21, 2012, the claimants approached Dotomi regarding their rights, but on April 16 the company responded that the claimants' names did not appear in its records and there was no information that they had any rights. "The respondents broke their promises to the claimants under the various employment agreements with the claimants and under the agreements between the parties, in bad faith, promising rights to shares in the venture," the statement of claim says.
Yair Goldfinger has been unavailable for a response.
Published by Globes [online], Israel business news - www.globes-online.com - on July 17, 2013
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