Tuesday, January 17, 2017 3:53:50 PM
The college sports website network operator has accused its former chief executive of sabotaging its relationships with its team site publishers.
CBS, Netflix Among Top Media Picks of Wall Street Analysts for 2017
College sports website network operator Scout Media has secured approval to pursue discovery against its founder and former chairman and chief executive, Jim Heckman.
Under the terms of an order to be signed by Judge Michael E. Wiles of the bankruptcy court in New York, Heckman will be required to turn over any documentation of any contact between him and anyone associated with the debtor since its bankruptcy proceedings began on Dec. 1, including email and phone records, if it exists.
Scout has accused Heckman of contacting the publishers who operate its college football and basketball team-specific sites and badmouthing the debtor to bidders to sow discord and derail its bankruptcy auction process.
"We've heard from various publishers that Heckman has been reaching out to them," debtor counsel Ericka F. Johnson of Womble, Carlyle, Sandridge & Rice said at a Wednesday hearing in Manhattan.
Scout had asked Wiles for permission to depose Heckman, but the judge declined to make a decision on doing so until after the documents were produced.
Heckman was fired in July for allegedly disregarding his duty to act as a faithful fiduciary to the company. He has vehemently denied any accusations of wrongdoing and said in a court filing he has not contacted any Scout publishers since his dismissal. Heckman has claimed that his firing was part of a takeover of the company by a cabal of Russian investors.
"We don't think a [discovery examination] or document production is necessary," said Heckman's lawyer, Robert D. Balin of Davis Wright Tremaine. "Because there's no evidence."
SMALL INVESTMENT, BIG POTENTIAL. TheStreet's Stocks Under $10 has identified a handful of stocks with serious upside potential. See them FREE for 14-days.
Scout's auction is set to take place on Jan. 27. The company's most valuable asset may be the contracts it has with its network of more than 100 individual team-site publishers, who charge about $100 annually for access to reporting, analysis of high school athlete recruiting and popular message boards.
The debtor announced at the hearing that it is finalizing a $9.5 million stalking-horse bid from CBS (CBS) . CBS owns one of Scout.com's main competitors, 247Sports.com.
Since his ouster, Heckman has formed the basic structure of a new media venture, theMaven Network. Scout's former chief operating officer, chief technical officer and 12 of its digital engineers, who resigned en masse to protest Heckman's firing, have signed on. The company went public on the Pink tier of OTC Markets in November through a reverse merger with shell company Integrated Surgical Systems and is scheduled to launch in the first quarter of this year.
Scout claimed in court papers that Heckman has disrupted the bankruptcy auction process for the sake of driving the company's price down, possibly to make a bid himself. The debtor accused Heckman in court Wednesday of accessing proprietary information through a data site as recently as last Thursday.
Balin said the data site accusation was new to him but denied that Heckman was making a move for Scout's assets.
"By the way," Balin said. "He's not interested in bidding."
Scout was hit with an involuntary Chapter 11 petition on Dec. 1 by three creditors alleging nonpayment. It filed a voluntary petition a week later, listing assets and liabilities between $10 million and $50 million.
The debtor is operating with the aid of a $4.35 million debtor-in-possession loan from prepetition lender Multiplier Capital. Wiles gave the loan final approval Wednesday.
READ MORE: Gawker Cements Settlement With Daily Mail Over Controversial Story
https://www.thestreet.com/story/13951194/1/game-on-scout-media-can-pursue-discovery-against-jim-heckman.html
I OWN SHARES IN MVEN.
Recent AREN News
- The Arena Group More Than Doubles Video Revenue and Drives Audience Engagement with Online Video Platform EX.CO • PR Newswire (US) • 05/09/2024 12:00:00 PM
- SURFER Announces Partnership With 2024 Big Wave Challenge • Business Wire • 04/29/2024 02:54:00 PM
- SURFER Announces New Editor-in-Chief, Special Edition Print Magazine • Business Wire • 04/23/2024 11:00:00 AM
- The Arena Group Appoints Sara Silverstein as Chief Executive Officer • Business Wire • 04/22/2024 11:00:00 AM
- The Arena Group to Host Investor Update Call on Tuesday April 9 • Business Wire • 04/03/2024 12:00:00 PM
- Manoj Bhargava Invests $12 Million More in The Arena Group • Business Wire • 02/14/2024 11:25:00 PM
- The Arena Group Announces Workforce Reductions in Strategic Move to Transform the Business Model • Business Wire • 01/18/2024 06:30:00 PM
- The Arena Group Announces Termination Of CEO Ross Levinsohn, Appoints Manoj Bhargava As Interim CEO • Business Wire • 12/11/2023 09:30:00 PM
- Deion “Coach Prime” Sanders Named 2023 Sports Illustrated Sportsperson of the Year • Business Wire • 11/30/2023 02:00:00 PM
- The Arena Group Reports Third Quarter 2023 Financial Results; Advances Bridge Media Acquisition • Business Wire • 11/14/2023 09:06:00 PM
- The Arena Group to Host Third Quarter 2023 Financial Results Conference Call on Tuesday, November 14 • Business Wire • 11/08/2023 02:14:00 PM
- The Arena Group Signs Definitive Agreement to Combine with Bridge Media Networks • Business Wire • 11/06/2023 01:00:00 PM
- The Arena Group Names Katie Kulik as Chief Revenue Officer to Drive Growth and Innovation • Business Wire • 11/02/2023 02:27:00 PM
- POWDER Magazine Returns With Special Print Edition; 2023-24 Photo Annual Issue Now Available • Business Wire • 10/16/2023 08:05:00 PM
- Jimmy Butler Guest Edits Sports Illustrated NBA Preview • Business Wire • 10/11/2023 02:08:00 PM
- TheStreet and Roundtable Media Partner to Launch New Crypto Channel, Expert Network • Business Wire • 10/05/2023 01:00:00 PM
- The Arena Group Launches ‘Arena Creator Network:’ A Creator-Led Cultural Content Hub Powered by Iconic Brands for Unmatched Social Branded Opportunities • Business Wire • 09/07/2023 06:05:00 PM
- The Arena Group to Participate in Lake Street Capital Markets’ Annual Best Ideas Growth Conference on September 14 • Business Wire • 09/06/2023 12:00:00 PM
- The Arena Group Names Grady Tripp as Senior Vice President of People • Business Wire • 08/18/2023 08:00:00 PM
- The Arena Group Signs Binding LOI to Combine with Bridge Media Networks, Creating Diversified Media Leader • Business Wire • 08/14/2023 08:15:00 PM
- The Arena Group Reports Second Quarter 2023 Financial Results; Announces Strategic Expansion and a Three-Year Extension of its Debt Facility • Business Wire • 08/14/2023 08:06:00 PM
- The Arena Group to Host Second Quarter 2023 Financial Results Conference Call on Monday, August 14 • Business Wire • 08/08/2023 10:00:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/07/2023 03:51:11 PM
- Sports Illustrated Presents Inaugural Power List: 50 Most Influential Figures in Sports • Business Wire • 07/13/2023 01:00:00 PM
- First-of-its-Kind App, TheStreet Powered by Tornado, Launches One-Stop Investing Experience • Business Wire • 07/12/2023 01:00:00 PM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM