May 25, 2004 : Switch and Data Sued by Node Com
📅 - Telecommunications carrier Switch and Data (switchanddata.com -> equinix.com) is facing a $5 million lawsuit by Node Com (nodecom.com), a developer of data center facilities, according to a report in the Tampa Bay Business Journal.
Node Com alleges that Switch and Data breached contracts and committed fraud by using undercapitalized shell companies to secure a 10-year lease worth $6 million. Four companies operating under Switch and Data, and the real estate companies that brokered the deal, are defendants in the case. The suit claims Switch and Data tried to obscure the use of shell companies to "convey an illusion of expansion through a single entity," the report said.
The lawsuit stems back to July 2000, when Node Com was developing a six-story Meridian building in West Palm Beach, Florida. At that time, Switch and Data expressed an interest in leasing space in the facility to house the expansion of its colocation business, the report said.
Node Com claims Switch and Data presented itself as a leading national operator with access to significant sources of financing. In September, Node Com used a signed lease with Switch and Data to secure a $6 million loan for the purchase of the property.
Joe Suppers, president of Node Com, says he spent an additional $2 million on renovations, expecting Switch and Data to fulfill an agreement to add $1.5 million in tenant improvements. Suppers also reportedly paid brokerage commissions totaling $219,945 and $114,000. A year later, says Suppers, Switch and Data did not move in, making only one rent payment. The company then notified Node Com of its inability to fulfill its obligations under the lease agreement.
Switch and Data, which secured $110 million in financing in March, has declined to comment on the lawsuit.
According to the report, a trial is expected in six months time.
Node Com alleges that Switch and Data breached contracts and committed fraud by using undercapitalized shell companies to secure a 10-year lease worth $6 million. Four companies operating under Switch and Data, and the real estate companies that brokered the deal, are defendants in the case. The suit claims Switch and Data tried to obscure the use of shell companies to "convey an illusion of expansion through a single entity," the report said.
The lawsuit stems back to July 2000, when Node Com was developing a six-story Meridian building in West Palm Beach, Florida. At that time, Switch and Data expressed an interest in leasing space in the facility to house the expansion of its colocation business, the report said.
Node Com claims Switch and Data presented itself as a leading national operator with access to significant sources of financing. In September, Node Com used a signed lease with Switch and Data to secure a $6 million loan for the purchase of the property.
Joe Suppers, president of Node Com, says he spent an additional $2 million on renovations, expecting Switch and Data to fulfill an agreement to add $1.5 million in tenant improvements. Suppers also reportedly paid brokerage commissions totaling $219,945 and $114,000. A year later, says Suppers, Switch and Data did not move in, making only one rent payment. The company then notified Node Com of its inability to fulfill its obligations under the lease agreement.
Switch and Data, which secured $110 million in financing in March, has declined to comment on the lawsuit.
According to the report, a trial is expected in six months time.
Reads: 2026 | Category: General | Source: TheWHIR : Web Host Industry ReviewsURL source: http://www.thewhir.com/marketwatch/swi052504.cfm
Company: switchanddata.com [switchanddata.com -> equinix.com]
Want to add a website news or press release ? Just do it, it's free! Use add web hosting news!