Rushville broadband firm sued by companies it acquired

Back to TopE-mailPrintBookmark and Share

The honeymoon is over between Rushville-based Omnicity Corp., the fast-growing provider of wireless broadband service, and a handful of owners whose companies it purchased.

Founded in 2003, Omnicity has grown to provide wireless broadband service to roughly 12,000 rural subscribers in Indiana and Ohio, largely by acquiring about a dozen smaller competitors.

But at least three of those firms' owners have brought lawsuits against Omnicity, charging that it failed to pay them completely for the purchases. All told, the owners say they're owed more than $1.2 million.

“It’s been a pretty rocky road for me, because I’ve lost my company and my employment,” said Steve Narducci, who sold the assets of Alexandria-based NDWave LLC to Omnicity in February 2009.

He sued the company Sept. 29 in Rush Circuit Court, claiming Omnicity owes him $405,911, plus interest, in addition to roughly $6,500 in wages and reimbursements.

Omnicity brought Narducci on as its vice president of field services in June 2008, before the acquisition was complete, but terminated his employment Aug. 30 of this year, according to the complaint.

Narducci’s suit was preceded by another against Omnicity filed Sept. 16 in a Holmes County court in Ohio.

Kyle Yoder, owner of Digital Network Solutions Inc. in Berlin, Ohio, agreed to sell the assets of that company to Omnicity on March 31 for $750,000 in cash at closing. The deal also called for $500,000 to be paid in quarterly installments over four years, and Yoder was to receive $150,000 in company stock.

Prior to closing, Yoder agreed to Omnicity’s request to defer $50,000 of the $750,000 initial payment until later, according to the suit.

Omnicity gave him the $700,000, the complaint said, but it failed to pay the first installment of the $500,000 note, triggering a clause in the agreement that made the entire balance due immediately.

Yoder also alleges he is owed the $50,000 he agreed to defer, and the $150,000 in company stock, as well as damages to be determined by the court relating to his employment with Omnicity.

Yoder claims he is owed severance and vacation pay, in addition to two paychecks, after Omnicity fired him as general manager of its Berlin-based operation on July 12.
A third suit, filed in Rush Circuit Court on Sept. 1, makes similar default allegations. That complaint was brought by Peru, Ind.-based North Central Communications Inc., which Omnicity acquired in April 2009.

North Central owner Kevin Sexton charges in his suit that Omnicity owes him $159,903, plus interest, after the company defaulted on a payment in August.

Reached by phone, Omnicity CEO Greg Jarman maintained that disagreements are bound to arise when numerous acquisitions are made.

“In all cases, hundreds of thousands of dollars have been paid to [the plaintiffs],” he said. “The fact is, we have done a lot of acquisitions and we’re continuing to do that.”

Jarman added that Omnicity will “strongly defend” itself in court.

Jarman, Omnicity’s former chief operating officer, became CEO in June 2009. He replaced Dick Beltzhoover, a private investor in the company.

In its most recent annual report, the company lost said it $2.6 million on revenue of $1.6 million for the fiscal year ended July 31, 2009, compared with a loss of $979,861 on $1 million in revenue the previous fiscal year.

For the three months ended April 30, 2010, the company lost $743,000 on revenue of $837,000, according to the most recent quarterly report the company filed.

In August 2009, Omnicity announced its plans to create 100 jobs within the next three years by investing $2.5 million in wireless infrastructure and a new corporate headquarters.

The new headquarters, to be built in the North Rushville Industrial Park, will house the company’s call center, collections and distribution operations.

Omnicity said it planned to hire customer-service representatives, field-service personnel and managers to meet growing demand from recent acquisitions and new fiber-optic construction contracts.  

Indiana Economic Development Corp. offered Omnicity up to $25,000 in training grants and said it would provide Rushville officials with a $110,000 grant to assist in off-site infrastructure improvements needed for the project. The city of Rushville said it would provide additional property tax abatement.

Omnicity has added 30 of the 100 employees the company pledged to hire and has a total of 56 employees, Jarman said. Omnicity is renting space in Rushville but still plans to build a corporate headquarters, he said.


Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Here are a few candidates for this new group, "ripped from the headlines." First up, that bizzaro State Senator Brent Waltz; secondly, the unethical Todd Huston, and his contractual arrangements scheme; Finally, but not least of all, the dishonorable Eric Turner. What sayeth you Greg Zoeller?

  2. Good day. I can't hide this great testimony that take place in my life I will love everyone to know it and be partaker that is why I always place it on answer, I am Mrs,Natalie Cuttaia by name, I live in Texas, United State Of America, I want to thank (Mr.Bruce Brandon) for his kindness upon my family life. I never knew that there is still nice lender like this on internet and earth here. Just some Months Back, I was in search for a loan of $100,000,00 as I was running out of money for feeding and rent. I was scammed $6,800 Dollars and I decided not to involve my self in such business again but a Friend of my introduced me to a loan firm due to my appearance and doings. And I told him that I am not interested of any loan deal anymore but he told me that there is still a nice lender who he will recommend me to, and I made a trial and I am most grateful lucky am I today, I was given a loan amount of $100,000.00usd, by this great Company (Bruce Brandon Loan Company) managed by (Mr.Bruce Brandon) If you are in need of a genuine or legit loan or financial assistance and you can be reliable and trusted of capable of paying back at the due time of the funds I will advice you to, contact him via: ( bruce.brandon071@gmail.com ) And you will be free from scams in the internet. All thanks to Mr.Bruce Brandon You are the one who remove me and my family out of poverty. The reason why i am doing this is that, i promise Mr.Bruce Brandon that if i truly got my loan, i will advertize his company and bring customers to his company. Contact him via ( bruce.brandon071@gmail.com )for the Loan you have been looking for..

  3. Hello, We are firm Organization formed to help people in needs of helps,such as financial help. So if you are going through financial difficulty or you are in any financial mess,and you need funds to start up your own business,or you need loan to settle your debt or pay off your bills,start a nice business, or you are finding it hard to obtain capital loan from local banks,contact us today via email mrsroseberrywilkinsfunds.usa@gmail.com So do not let these opportunity pass you by because Jesus is the same yesterday, today and forever more. Please these is for serious minded and God fearing People. Your Name: Loan Amount: Loan Duration: Valid Cell Phone Number: Thanks for your understanding to your contact as we Await Regards Management Email:mrsroseberrywilkinsfunds.usa@gmail.com

  4. The question is, where could they build a new stadium? It seems in the past year, all the prime spots have been spoken for with potential projects. Maybe in the industrial wasteland area a block past Lucas Oil? I think it needs to be close to the core, if a new stadium is built.

  5. Aldi is generally a great shopping experience. Still, I'm sure YOU wouldn't want to shop there, which I consider a positive.