Long after it shut down operations, Excite@Home Corp. is still kicking up
legal battles. In the latest round, the failed high-speed cable-modem provider
is suing former affiliates Comcast Corp. and Cox Communications Inc.
In a federal lawsuit filed Sept. 23 in the U.S. District Court in Wilmington,
Del., bankrupt Excite@Home is charging that the two cable MSOs violated their
contracts with the company by making deals in early 2000 that benefited them but
eroded Excite@Home's business.
The suit -- which named Comcast president Brian Roberts, other board members
and officials -- seeks a minimum $600 million in damages.
Comcast's 8K filing with the Securities and Exchange Commission, posted
Thursday, noted that the committee of unsecured bondholders filed the suit, as
expected, seeking alleged 'short-swing' profits under the Securities and
Exchange Act.
Along with at least $600 million in damages, the suit seeks unspecified
awards for the defendants' alleged breach of fiduciary duty regarding
transactions between Excite@Home, AT&T Corp., Comcast and Cox.
The 8K filing noted, 'Comcast believes this suit is without merit and intends
to vigorously defend itself in the action.'
Comcast's 8K also noted that in May, Excite@Home -- little more than a shell
with no real assets -- filed a liquidation plan as part of its Chapter 11
bankruptcy proceedings. That was modified in June to include creditor
settlements and a clause that all claims and legal action against AT&T and
shareholders would be transferred to a liquidating trust controlled by the
Excite@Home bondholders. That trust would contain a pool of between $12 million
and $17 million to pay off the claims.
That arrangement was approved by the bankruptcy court Aug. 15, but it has not
yet taken effect.
Comcast's filing also noted that after the pending merger between it and
AT&T Broadband closes, Comcast may be liable for 50 percent of the AT&T
liabilities related to Excite@Home, with the other half still AT&T's
responsibility.
Cox, meanwhile, is aware of the suit, 'but we have not seen the official
documents yet,' spokeswoman Laura Oberhelman said.
Although Cox's policy is not to comment on pending litigation, Oberhelman did
say, 'We do intend to vigorously defend ourselves.'
