Web.com Rescinds Acquistion
June 23, 2006 — (WEB HOST INDUSTRY REVIEW) — Domain registrar and Web hosting provider Web.com (web.com) announced on Friday it has filed to rescind its recent acquisition of WebSource Media (websourcemedia.com).
The registrar recently learned, among other matters, that the Federal Trade Commission filed a sealed action in the United States District Court for the Southern District of Texas against WebSource Media and its members that alleges unfair and deceptive acts and business practices prior to the acquisition.
Web.com was not named as a defendant in the FTC action, nor was it aware of any investigation or alleged unfair and deceptive practices at WebSource Media. The FTC’s sealed case exposed information previously undisclosed by WebSource Media to Web.com, which Web.com believes contains material breaches of the acquisition agreement.
The court has appointed a temporary receiver for WebSource Media while Web.com has been appointed to manage the business operations of WebSource Media as an agent of the receiver.
Web.com has incurred approximately $3.5 to $4.0 million of expenses regarding the acquisition, which includes debt payments, liabilities, operating costs, initial earn-out and closing costs. The company says it will use all appropriate legal means to recoup these funds and recover damages.
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