Levin Law Firm
In The News
In The News

Edward O. Welles, “Options, Equity, & Rancor” (Excerpt: Disenchantment in the New Economy), Inc. Magazine, July 01, 2001

[The Levin Law Firm represented Timothy Kay, a pioneer of Internet data base search engine technology. Kay consulted for Infospace, then a start-up Internet infrastructure company. After Infospace went public, it refused to honor Kay’s stock options. The Levin Law Firm sued Infospace in Federal District Court]

Kent Plunkett's tale of woe might have amounted to an isolated dispatch from dot-coms' dark side if not for the fact that at least five other plaintiffs have brought suits making similar charges. The suits allege that Jain lured talented people to InfoSpace with the promise of lucrative equity stakes, exploited their knowledge, and then discarded them once he had what he needed.

Tim Kay, for example, was a Caltech computer scientist who had written a program for one of the first search engines for Internet white pages. Kay commented on his case against InfoSpace through his lawyer, David Levin, who maintains that Kay's relationship with the company began when Jain offered him a job as InfoSpace's technology chief. According to Levin, Kay declined the offer but agreed to serve as a consultant. Levin says Kay and Jain then agreed that for each hour he worked, Kay would receive an option to buy 150 InfoSpace shares at 10˘ a share.

Levin says Kay worked 190 hours for InfoSpace before Kay and Jain got into a dispute over the technological direction of the company. According to Levin, in December 1996 Kay asked Jain for the stock he says the company owed him, nearly 29,000 shares. "Naveen told Tim to pound sand," says Levin. Kay severed his relationship with InfoSpace; only later when the company had gone public and actually had a market value would he file a suit.

Whether the dispute among the parties had grown heated before InfoSpace went public, in December 1998, is unclear. But one thing is certain: once the company had a market value, the options were worth something -- arguably a bonanza for those who had received and held on to them. At the same time, the company publicly acknowledged that the question of options was likely a sticky one. Among the most interesting disclosures in the company's amended SEC filing was a minor note that made the following admission: "The company's procedures with respect to the manner of granting options to new employees were not clearly documented." The company further recognized in its filing that the lack of clear documentation made InfoSpace vulnerable to potential claims. Jain, therefore, "agreed to place into escrow 1,000,000 shares of common stock beneficially owned by him to indemnify the company. ..."

Ten months later, when InfoSpace sold additional shares to the public, Jain increased that sum to 2 million.

Those precautions proved necessary, as lawsuits were indeed in the works.

In February 1999 Mark Kaleem settled his case for a reported $4.5 million. Later that year, according to the Richards complaint, InfoSpace allowed Tim Kay to buy 16,536 shares of its stock for 10˘ each. In March 2000, Kent Plunkett settled for a reported $10.5 million. Last January, Robert Hoffer reportedly settled for an undisclosed sum. The Lucky and Richards suits are still pending. Lawyers for the plaintiffs declined to comment on specific details of the settlements, citing confidentiality provisions in the settlement agreements.

Sarah Lubman, “Middlemen Thriving in Lucrative Industry While Foreign Workers Complain of Abuse," San Jose Mercury News (CA), November 19, 2000, Front, Morning Final, page 1A

[The Levin Law Firm represented two software engineers who were recruited in India by a U.S. software company. When the engineers received fair offers to work for different U.S. companies for equity and more money, the original company sued them. The Levin Law Firm represented the engineers in a jury trial in Santa Clara County Superior Court]

Other middlemen have learned that contracts that demand large payments from workers who leave before a certain period of time are easier to defend in court if they're claimed as compensation for ''liquidated damages.''

That's what happened with Kavyananda Sidbatte. A San Jose software-training and consulting company named Software Technology Group Inc., or STG, offered him a job in March 1997 and asked for his passport and original degree certificate for visa processing. Two months later, STG told Sidbatte that his visa had come through and that he would be traveling to San Jose.

When Sidbatte arrived in New Delhi, ready to fly to the United States, STG presented him -- for the first time -- with an employment agreement that said he would pay $25,000 to STG in liquidated damages if he left the firm before two years. Sidbatte had already quit his prior job and was 2,000 miles from his Bangalore home. So he signed, although he later said he hadn't really understood the implications of the contract. Only after he signed were his passport and degree returned. Six days later, he flew to San Jose.

Two years later, the contract he had signed landed him in a breach-of-contract lawsuit with STG. Sidbatte had been hired at a base salary of $42,000 and left STG after 13 months to work for a client, who gave him a $20,000 raise.

STG sued Sidbatte and another H-1B worker in a similar situation, Srinivas Gaddam, for $25,000 each plus legal costs. During the trial, STG justified the damages with rupee-denominated receipts for Indian newspaper advertisements, hotel bills and travel expenses from three 1997 recruiting trips, although Gaddam and Sidbatte were among hundreds of people interviewed.

CEO Yogesh Vaidya said in a deposition that he had nothing to do with preparing the original offer letters that hadn't mentioned liquidated damages.

In the end, the company won: in January of this year, the jury sided with STG. The two engineers recently reached a compromise with STG to pay back 60 percent of the damages.

In a telephone interview later, Vaidya said STG held passports and diplomas to prevent applicants from applying for another visa through a different employer.

Jane Lii, “Patron of Public Art: He’d Give Palo Alto Street Museum-Like Quality," San Jose Mercury News (CA), November 23, 1999, Peninsula, page 1B

[David Levin volunteers his time for several arts organization. He served for six years on the Palo Alto Public Art Commission including two years as its Chair. He is an outspoken advocate for artists and the funding of public art works, particularly in the California Avenue commercial district in Palo Alto where the Levin Law Firm has been located for over four years]

When it comes to public art, Gerald Brett has a simple philosophy: the more the merrier. And for the last five years, he has worked hard to achieve that goal.

A member of Palo Alto's public arts commission since 1994 and the owner of a private school specializing in English as a second language, Brett has helped raise some $25,000 from area merchants for three pieces of artwork on Palo Alto's California Avenue. He is working with the commission to create more pieces along the city's gateways near Menlo Park, East Palo Alto and Los Altos.

''Gerald is a man who had a vision for California Avenue and a personal passion for collecting art,'' said Leon Kaplan, the city's liaison to the commission. ''He has a passion for supporting artists and a vision of how he could use these passions to enhance and create a sense of space for California Avenue.''

Brett, 51, said he began collecting art since the early 1970s. His school, Language Pacifica at 456 California Ave., is a testament to his passion: Paintings, sculptures and mixed-media pieces fill nearly every inch of the walls and counter space in the four-story building. The pieces range from decorational to functional to plain whimsical and are done by artists from all over the world.

They include a steel bench and a chair by the noted San Francisco-based sculptor William Wareham and sculptures and paintings by Santa Clara artist Kelly Detweiler. Since the 1980s, he has helped organize artist exchanges between the Bay Area and Japan.

His passion expanded to public art for California Avenue three years ago, at a time when the California Avenue business district was going through an economic revival. The way Brett tells it, he was frustrated by the city's lack of public art. The city had collected more than 10 pieces of public art, and Brett wanted to speed up the process.

P.A. trails in funding

Unlike larger cities such as San Jose, which sets aside a certain percentage of development tax for public art acquisition, Palo Alto does not have such a policy and only gets a small allocation from the city budget each year. Whereas San Jose has about $6 million in public art this year, David Levin, chairman of the Palo Alto Public Arts Commission, said Palo Alto has only about $40,000:

''Art is the highest form of civilization,'' he said. ''In this day of enormous riches in this city, we're riding the wave of prosperity but we're not going to have much to show for it.''

But Brett wasn't going to let the lack of funding stand in his way. If the city did not have enough money to buy art, he was going to tap into the avenue's merchants for help. His effort has received support from the California Avenue Area Development Association. So far, the public and private partnership has helped California Avenue acquire three works totaling nearly $100,000.

Although a passionate collector of artists worldwide, Brett's vision for California Avenue public art has been to showcase Bay Area artists:

(box) In 1996, he persuaded 21 California Avenue merchants to raise $8,000 toward the $15,000 needed for ''California Native,'' a gateway piece by Berkeley-based public artist Susan Leibovitz Steinman. The piece, comprising native grasses, boulders and hand-painted banners, is located on the median strip of California Avenue, off El Camino Real.

(box) At the same time, Brett convinced the city to buy another piece, an untitled sculpture by Berkeley-based artist Wang Po Shu of a 25-foot birch trunk engraved to look like a rope ascending into the sky.

(box) Two years later, Brett started a fundraising effort to acquire a third piece, a stainless steel portrait of a face by Santa Cruz artist Fred Hunnicutt.

Two more coming up

The avenue is looking to add two more pieces in the coming year: ''Go Mama,'' a whimsical sculpture of a girl by Palo Alto-based artist Marta Thoma, and a sculpture by Wareham. The pieces will make California Avenue the street with the most public art in the city, Kaplan said.

So far, they have won merchants the bragging rights to call it ''avenue of the arts.''

''It makes you feel so good when you come here,'' said Warren Wang, the owner of Hotel California, near Ash Street.

But Brett's vision isn't just for California Avenue. He and the art commission are already planning large pieces in the city's gateways.