September 8, 2004 — (WEB HOST INDUSTRY REVIEW) — Telecommunications firm and data center operator Switch and Data was ordered by a jury in Travis County, Texas to pay more than $10 million for backing out of its lease for office space in downtown Austin, according to a report published last week in the Austin American-Statesman.
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Switch and Data reportedly reversed a plan to move into the offices, built specially for the company in the Perry-Brooks Building in Austin, as part of its strategy for survival following the tech bust. A Texas state District Jury found that Switch and Data had breached a lease signed in 2000 by never moving into the space.
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The jury reportedly found the company guilty of fraud, and assessed damages totaling $7.7 million, including $5 million in punitive damages. The company was also ordered to pay $3.95 million in lost rent on the 10-year lease, along with $668,000 in attorney’s fees.
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Switch and Data, which reportedly backed out of leases in about a dozen other locations, still faces pending lawsuits in West Palm Beach, Buffalo, Chicago and New Orleans. The company is said to have settled similar lawsuits in Montreal and Boston.
