IBJNews

Rural broadband provider Omnicity racks up legal bills tied to acquisitions

Back to TopCommentsE-mailPrintBookmark and Share

Omnicity Inc.’s business plan is to snap up rural broadband systems throughout the Midwest. Lately, however, it’s been accumulating more in the way of lawsuits.

The latest of at least five suits filed since early last year involves Columbus, Ohio-based SZD Whiteboard, a consulting firm that says Omnicity defaulted on a promissory note.

Whiteboard seeks $134,737 plus 8-percent annual interest on the note, issued last year in return for consulting services to help Omnicity identify and acquire wireless providers in rural Ohio.

U.S. District Court for the Southern District of Ohio on June 21 entered a judgment in favor of Whiteboard, according to court records.

Whiteboard pointed to Omnicity’s recent financial statements, which included a $418,290 loss in its most recent quarter, ended Jan. 31. Rushville-based Omnicity had a working capital deficit of $4.2 million and stockholders’ deficit of $2 million.Omnicity.gif

“All of these factors combined raises substantial doubt regarding the company’s ability to continue as a going concern,” Omnicity stated in its most recent financial report filed in May.

Whiteboard also asked the court for a temporary restraining order and preliminary injunction to prevent Omnicity from transferring collateral pledged on the note.

Judge Michael Watson scheduled a hearing on the request for June 29. But Watson ruled just before the hearing, as Omnicity officials were on their way to Columbus, to stay the request by Whiteboard, pending mediation.

Alan Starkoff, an attorney for Whiteboard, said he was unsure why the court chose mediation.

Omnicity has been held out as a promising growth company.

Last year, the Indiana Economic Development Corp. offered up to $25,000 in training grants toward an expansion in Rushville.

The IEDC also provided a $110,000 grant to Rushville officials to help the company with its expansion. The company has about 45 employees.

Much of Omnicity’s business involves delivering Internet service via wireless signals. Omnicity said it had 10,600 active subscribers on Jan. 31, built mainly through acquisitions.

But Omnicity has rankled some of the ex-owners of broadband firms it acquired along the way.

Lawsuits filed in Rush County and in Holmes County, Ohio, by four owners of companies Omnicity purchased allege Omnicity failed to fully pay them for the acquisitions. Collectively, they claim they’re owed more than $1.2 million.

Among them was Steve Narducci, who sold his Alexandria-based NDWave LLC to Omnicity in early 2009 and was hired by Omnicity as part of the deal.

Last year, Narducci filed suit, alleging Omnicity owes him more than $405,000, plus interest.

Kyle Yoder, former owner of Digital Network Solutions, in Berlin, Ohio, also sued last year.

Yoder said Omnicity gave him $700,000 in cash but failed to pay him the installment on a $500,000 promissory note. He alleges that triggered a clause that made the entire amount due immediately. He’s also seeking a $50,000 payment he agreed to defer, and $150,000 in company stock.

Omnicity has been fighting back against both men.

In a countersuit filed earlier this year, Omnicity alleged Narducci breached his contract and fiduciary duty and defamed it by telling certain companies that it was on the “verge of bankruptcy.”

Narducci was terminated by Omnicity, and later formed a competing company. He refuted Omnicity’s charges, telling IBJ earlier this year, “I had to find a way to make a living again.”

Omnicity also filed a countersuit against Yoder, alleging he breached his contract and non-compete clause, failed to pay vendors, and refused to provide the company with terms and conditions of customer contracts.

“In both these cases, we have not gotten what we purchased,” Omnicity CEO Greg Jarman told IBJ last February.

Omnicity’s vice president of business development and corporate partnerships, David Waddell, characterized the Whiteboard suit as “a simple disagreement between two companies.”

Waddell said the litigation in the last two years masks the progress Omnicity is making. Its revenue grew to $1.2 million in the first quarter of this year, from $635,946 for the same period in 2010.

He also pointed to progress in bringing broadband to underserved rural areas, such as Columbiana County, Ohio, where Omnicity plans to offer service to more than 300 homes from a 250-foot tower.

“Our business model has proven itself,” Waddell said, saying a new round of acquisition announcements was forthcoming.

In February, Rush Superior Court ordered Omnicity to pay $67,500 to owners of USppp Inc., which Omnicity bought in 2009.

It’s also been behind in loan payments to the Muncie Industrial Revolving Loan Fund.•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Good Day I am Mr (Victoria Wright) from United state of America, i stayed in NEW YORK, and i have a broke up business, until i found this company email who help me to gain a loan for business,, and now i want to used this short medium to congratulate the below company for the fast and safe money they loan to me without any form of collateral, i loan 500,000USD from the company to save my business and lots more, i saw their mail on the internet, everyone always give testimony for what they did, so i quickly contacted them and they all did everything for me without stress and my money was sent to my account just 3 days later, i was surprise and i feel so glad, now i have a standard business control agent who help me, now i will advice those who need urgent loan to contact him at the bellow email:zenithfirm12@gmail.com

  2. NOTICE:This is to inform the general public that Vampires are real. My name is James Franklyn.,am an agent of vampire,am here to introduce our new world trend to you,a world of vampire where life get easier,we have made so many persons vampires and have turned them rich,you will be assured long life and prosperity,you shall be made to be very sensitive to mental alertness,stronger and also very fast,you will not be restricted to walking at night only even at the very middle of broad day light you will be made to walk.In case you are wildly oppressed by some unscrupulous persons we can still help you fight them.Your protection is assured immediately you join.Just contact the bellow email if you are interested we are here to attend to you anytime you want us. Contact the bellow email for more details. Email:vampirescreed@hotmail.com Sincerely: James Franklyn.

  3. Bravo! Someone else that is willing to speak the truth! Bravo!_____NBCSN is available in almost 2 MILLION more homes than just a few years ago, but Indycar STILL gets less total viewers than it did just a few years ago when NBC took over Versus. Attendance and ratings cratered with the end of season races (just when the title battle got "interesting" HAH!__________And now...new race in Basilia, where Miles celebrated the "rich history" of Indycar racing there. Rich history? What, 7 events in the 100 years of AOW? Yep, some history. Well, at least its an oval. It's not??? Are you kidding me??? Gosh darn road racin furriners.

  4. PURITY RAY LOAN OFFER........ Have you been denied by your banks,or are you in need of of an urgent loan to pay of your bills we are capable of giving loans @ cheaper rate to interested individuals, student, companies and members of the public in need of finance to settle bills, we do offer considerable loans which you can count on. For more information on our various types of loan,then you will have to contact PURITY RAY LOAN FIRM, to help you achieve your desire LOAN APPLICATION FORM TO BE FILLED BORROWERS INFORMATION * Full name:………………………. * SEX * ……………………………. * Country………………………….. * State:……………………………. * Land:…………………………….. * Occupation:…………………….. * phone number:…………………. * Telephone: ………………………….. * Age:………………………………. * Amount needed as loan:……… * Loan Duration:………………….. * Propose of Loan:……………….. * Annual revenue:………………… * Monthly Income:……………….. * Guarantee:………………………. * Payment: monthly or annually Email.....purityrayloanfirm@gmail.com Thank you and God bless Mr Purity Ray PURITY RAY LOAN FIRM we tend to serve you better

  5. Problem: most of the people responding to this article don't know about this service AT ALL! Why? Lack of awareness. This isn't IndyGo. This is CIRTA: might as well be the mattress company because they are asleep at the wheel - something like 3 directors over the last year? Playing with federal grant money is great! This "region" wants commuter rail service, has spent MILLIONS on Transportation studies yet can't even support a commuter bus line? This is largely for suburban riders to get to downtown - not for "service people to work in our hotels and restaurants" ! Get your head out of your backside!! These are professionals, students etc. that don't want to fight traffic, save some money on parking, gas, stress.... if CIRTA would put their federal money into widely promoting the sevive to Greenwood, Fishers & Carmel instead of finding directors and studies - this would be a successful service. Our family uses(d) it daily for the last several years - but the recent uncertainty & now unreliability due to cuts from Carmel has been a problem. Now, costs us an additional $350/month for gas & parking ( $4200/year) plus vehicle wear, service, environmental impact ... YES - this REGION needs this this type of service in order to keep growing and getting the people it needs to fill skilled positions in downtown Indianapolis. Think outside of your own car !!!

ADVERTISEMENT