Russo & Hale: How to settle the lawsuit
Tuesday, March 27, 2007 by Dave Winer.
As I've written previously, the issues around UserLand's future are tied up in litigation by the company's former attorneys. I know the readers of Scripting News don't know the details of UserLand's corporate structure, even so, I want to outline what I think a reasonable deal would be for Russo & Hale, and UserLand's other shareholders. If their issues with me continue, I have no doubt that all the details will eventually come out. 
So here, in a nutshell is what I think we should do.
First Russo & Hale claims that weblogs.com belonged to UserLand. I don't agree, but suppose for the sake of argument we concede the point.
Not coincidentally, just before I started operating the site on my own server, there was an offer from another company to buy weblogs.com for $250,000. I didn't want to sell it, for a variety of reasons.
It's lucky we had that offer, because that clearly puts a value on the service at the time of the transfer. From that point, there was a lot of work, a lot of rewrites, a lot of technical challenges (remember the June 2004 explosion), a lot of risk, and huge growth, which resulted in a sale, after much negotiation, to VeriSign.
The story of the sale leaked before we were prepared to announce it, unfortunately, while I was flying from San Francisco to Greensboro, North Carolina to participate in a blogging conference. I found out the story leaked while I was transferring planes in Cincinnati, and then when I got to Greensboro, I had to change hotels to find one that had good Internet connectivity so I could help explain to the blogging world what the deal was and why we had done it.
However, before I even got off the plane, I was getting emails from Russo threatening to sue me. Note that up until this point, Russo was my attorney, UserLand's attorney, secretary, board member, shareholder, and friend! Before I could even get one word in, he had already escalated to suing me. He never even picked up the phone before he started getting legal with me.
And as he taught me so well, when that happens, you have to get a lawyer to do your talking, which is exactly what I did. And now two years later, we still haven't tried to work this out as honorable gentlemen. People may be wondering why an attorney is suing his former client, without trying to work it out, and honestly so am I.
Anyway, if I were an arbitrator here, I'd say we're pretty lucky there was a clear price set. So let's do the math, distribute $250,000 to UserLand shareholders, according to ownership, shake hands and let's move on with our lives. I'll overlook the fact that Russo & Hale forced me to waste over $50K on legal fees. And most important to most of the people reading this, we get to focus on getting UserLand working again.
