FusionStorm has made the final payment of court-ordered damages to rival Technology Information Group two years after the company, along with some of its executives, was found guilty of illegal hiring practices.
Dan Serpico, president of FusionStorm, a San Francisco-based solution provider, said his company celebrated after making the final payment of its $10.9 million in compensatory and punitive damages in July.
"For FusionStorm, this removes a big cloud hanging over our heads," Serpico said. "Whether there were whisper campaigns about us or overt conversations, there were a lot of people who were unsure whether we would survive. But in fact, for the second quarter and first half of this year, we had record billings."
The ruling stemmed from San Diego-based TIG's accusations in early 2007 that FusionStorm, several of its top executives and some of TIG's own former employees engaged in unethical business practices related to FusionStorm's move to set up a Tampa, Fla., branch office.
In its lawsuit, TIG alleged that FusionStorm hired a TIG executive in 2006 to set up a branch office in Tampa, Fla. That executive, while still a TIG employee, allegedly hired other TIG personnel to join the office. Those employees then allegedly engaged in such unethical business practices as telling at least one vendor and several customers that TIG was going bankrupt in order to get registered TIG deals reassigned to FusionStorm.
Making the final payment of the judgment from the lawsuit meant lifting a weight off FusionStorm, Serpico said. There were concerns about the company among its vendor partners, and FusionStorm had to sell its Jeskell government business to help put the payment plan in place, he said.
"We solved a considerable problem and moved on to grow our business, make money and generate confidence with our vendors that we can make the kind of impact we had before," he said.
Bruce Geier, president and CEO of TIG, said the lawsuit helped the solution provider community better understand the issues related to unethical hiring and business practices.
"We set a stake in the sand about what behavior is acceptable and what is not," Geier said. "Our industry is relatively young compared to others like the auto industry. This helps our industry mature in the long run."
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