The lawyers are at the gates of Moses Znaimer’s Zoomer media empire.
The leathery mogul’s got nearly $5 million in claims hanging over that glabrous noggin, more than enough to wipe out the $3 mil cash that ZoomerMedia, the penny-stock outfit that embodies his ambitions, has on hand.
Both lawsuits stem from Znoomer`s 2010 takeover of VisionTV.
Zoomer bought the holy-rolling broadcaster for a cool $25 million from what was then the S-VOX Foundation, since rechristened the Inspirit Foundation.
Two wee snags: S-VOX’s former CEO, Bill Roberts, is claiming Zoomer reneged on his employment deal. He wants $940,000. And Inspirit wants to sweeten the purchase price by some $4 million.
Roberts’ offered nearly half a mil in severance
Zoomer bought Roberts along with Vision. According to Roberts, it also took on his contract, which included two years’ severance – a $490,000 boodle – if he stayed till the end of his contract, Oct. 31, 2011.
Roberts also had a sabbatical, a paid six-month snooze at Massey College or “similar institution,” that was supposed to begin Nov. 1, 2011, a day after his contract ended.
Fast forward to summer 2011, and Zoomer wants Roberts to stay in harness for another year, and delay the severance payment until then.
The extension letter prolonging Roberts’ contract agreed to the severance extension, “provided that the funds were held in trust by the Defendant [Zoomer] and expressly treated as wages (and as such, the directors would be personally liable in the event of a refusal or failure to make payment).”
Translation: In the shurely unforseeable event that Moses and/or Zoomer reneged, Roberts could take it out of the board’s collective ass.
But Znaimer agreed, Roberts claims, although he took exception to the sabbatical. He hadn’t liked the “entitlement” when Zoomer was negotiating the purchase of Vision, and still didn’t.
Moses begged Roberts not to litigate
Anyhow, the extension went off the rails just before Oct. 31, Roberts’ payday. Negotiations continued but Roberts threatened litigation in January 2012, when his lawyer wrote Zoomer’s lawyer, setting Jan. 20 deadline for settlement because Zoomer would not agree to sabbatical “and an increasing concern over the Defendant’s financial ability to fulfill the payment of the lump sum severance payment.”
Znaimer and Roberts then met without lawyers, and Moses begged him not to litigate. Roberts would get his lump sum, and the sabbatical would be resolved in March. Znaimer told him Zoomer “was in the midst of some financial issues which would be adversely impacted if Mr. Roberts were to commence an action at this time,” Roberts claimed.
But the pay-out was not to be. On March 1, Zoomer COO Gord Poland sacked Roberts. But this wasn’t the clear-out-your-desk-frogmarched-out-by-security kind of firing. It was a working notice of termination, which means Roberts would continue to work, and get paid, instead of getting severance in lieu of notice.
Zoomer still wanted Roberts till Oct. 31 that year, but “was not going to honour the payment of the lump sum severance nor the sabbatical entitlements.”
Poland told Roberts he would get not two years but two months’ severance; a subsequent legalist’s letter said four weeks.
As Roberts continued to work over summer 2012, he says Zoomer sweetened the deal yet again. He had to provide written weekly reports on his activities; he was sequestered in an office away from other staff, and excluded from many activities that were part of his job.
This caused physical, mental and emotional stress, as, Roberts claimed, was the point. As well as the $490,000 severance, his statement of claim asks for $150,000 for the lost sabbatical and lumps for bad faith, aggravated damages and the intentional infliction of mental stress.
Moses’ annual take from Zoomer boomed to $1.2 mil
Meanwhile, Zoomer has cash on hand, but ad revenues are bleeding. The take for the last quarter of 2013 was $14.4 million, down about $500,000 from the same period in 2012, and it had a loss $449,092, a swing of more than $1 million from the profit of $736,111 in the 2012 quarter.
Vision, which accounts for 60% of the total business, makes money. Print and radio are taking a dump.
None of this contagion has, thank God, affected Znaimer’s pay. His annual take from Zoomer boomed after the company bought Vision, jumping to $1.2 million a year (plus $60,000 to cover his home office) from $264,000 in fiscal 2010 and $283,333 in 2009.
Znaimer owns about 62% of Zoomer’s common stock, and Fairfax Financial about 16.5%. It’s trading at 12 cents a share.
Trebles all ‘round!