ComputerLand Founder Reaches Settlement
SAN FRANCISCO (AP) _ ComputerLand Corp., the world’s largest computer retailer, will offer some stock to the public within two years as part of a settlement in a continuing court battle.
A public offering has been opposed in the past by chain founder William H. Millard, who has agreed to renounce all management control in the company until 1994 as part of the settlement.
Millard and his daughter Barbara also resigned from the chain’s board of directors. The Millards own 96 percent of the chain’s stock.
The changes in management and stock ownership were announced Thursday by officials of ComputerLand and MicroVest Corp., the investment company that earlier won a lawsuit against Millard and his companies.
Millard, 52, is appealing that verdict, and the settlement enables him to pursue the legal battle without endangering the operation of ComputerLand franchises.
MicroVest sued Millard over a $250,000 promissory note signed nine years ago, when ComputerLand was a fledgling operation. MicroVest had contended the note entitled it to 20 percent of Millard’s companies and a jury agreed. The jury awarded MicroVest $141.5 million in damages as well as the 20 percent share, which has an estimated worth of between $100 million and $300 million.
The verdict saddled Computerland itself with $10 million in punitive damages, plus shares in legal fees and dividends owed to MicroVest. The rest of the damages were assessed against Millard and his holding company, IMS Associates Inc.
Under terms of the settlement announced Thursday, ComputerLand was relieved of its financial obligations under the court decision. That means Millard and IMS now are liable for damages of $131.5 million.
MicroVest agreed to waive a $25 million bond Millard had been scheduled to pay by Friday to pursue his appeal.
The investment group also agreed to a change in the collateral Millard must place in trust to protect MicroVest’s interest during appeal. Instead of placing all the stock of the privately held IMS in trust, 35 percent of ComputerLand’s stock will serve as collateral.
Herbert Hafif, attorney for MicroVest, said the public stock offering is the ″attainment of a goal″ for his clients.
″We’ve transformed our minority position in a one-man company into a position in one that will be public,″ he said. ″That’s a victory.″
Both Hafif and Barbara Millard said the settlement also included some agreements that would not be made public.
Meanwhile, Millard spokesman Glen Udine said Millard probably won’t return to the chain’s board of directors when the settlement time limit expires. He said the founder instead will ″go off and create new things. He’s looking forward to expressing his entrepreneurial spirit and skills.″