For use: Friday, October 15, 2000 and thereafter

 

Future Shoes: "OnYourSide.com, RIP"

by Michael Finley

Copyright (c) 2000 by Michael Finley

OnYourSide.com, Inc. today sought bankruptcy protection in federal court under Chapter 11, following a series of weekend class action suits against the upstart Internet company and claims from a host of plaintiffs exceeding $214 million.

The announcement dashed hopes that OnYourSide.com, formed in the spring of this year, would turn around and become the major player in the dotcom sweepstakes that Wall Street had hoped for.

OnYourSide.com came into existence in May 2000 as an e-commerce ombudsman service. The brainchild of Reuben Norvel of Elko, NV, the idea was to serve as a rapid "electronic go-between" to resolve disputes between e-tailers and customers online. For a percentage of the gross in each resolution, OnYourSide.com expected fee income on both ends in the ten figures within 24 months. The fledgling company benefited from over $15 million in venture capital from three independent investment groups.

Following the company's initial public offering in August, the value of a single share of OnYourSide.com stock on the NASDAQ index rose from $10 to over $91, increasing the company's capitalization to over $1.4 billion.

The company was touted as one the best bets of the summer's high-flying net stocks. With the market's general retreat from net stocks starting in June, OnYourSide.com saw its share price drop to $0.73. Thousands of investors demanded an explanation, but none has been forthcoming.

OnYourSide.com is being sued in 32 countries by over 40 public interest groups. It is the target of a class action suit representing over 2,750 individual and institutional investors. Advertisers claim the company has liquid assets of $180 million in outstanding billings and collectibles. End customers have filed over 180,000 complaints with Better Business Bureaus and state attorney generals' offices in the U.S. alone. Assorted individual lawsuits number in the hundreds, and include charges ranging from fraud, misrepresentation, deceptive business practices, perjury, embezzlement, filing false reports with the SEC and petty theft.

Attorneys for OnYourSide.com confirmed Friday that the company had ceased daily operations after its assets were liquidated by Grand Wada Bank of Kuala Lumpur.

Asked by reporters to account for the company's fall from grace, Chairman and CEO Reuben Norvel blamed a soft market and the inability of a young company to respond in a manner to rapidly escalating demands.

"We had great hopes for OnYourSide.com," Norvel said, lugging a heavy duffle aboard a midnight plane bound for Buenos Aires. "The time seemed right for a company that spoke up for consumers, while delivering potent return to investors. Things just didn’t work out."

Asked where all the money went, Norvel just shrugged, and shouted something over the roar of the propellers that might have been "Beats the hell out of me," as the passenger compartment door closed behind him.