After a year's worth of claims and counter claims, a trial date of October 18 has been set in the lawsuit filed by Steven Marshank against his former employees, New Frontier Media.
On Sept. 1, 1998, Marshank, who was fired by the company, has filed wage claims for $113,000 and alleged breach of contract against New Frontier Media. Through his attorney Abraham V. Hutt, Marshank alleges that the company promised him 25,000 stock warrants at a $1 per warrant, as a signing bonus.
In his suit, Marshank, who managed the company's international affairs, also claims those agreements were stipulated in writing by another former company employee, Matt Cohen. Cohen was chief operating officer at the time. Marshank also contends that those offers were reconfirmed in subsequent letters sent from Marshank to company vice president Michael Weiner and company CEO Mark Kreloff. The bonus, according to Marshank in his suit, was never paid.
Marshank also alleges that failure to issue those warrants violates rules and statutes of the Securities and Exchange Commission. Marshank's claims don't end there. He also alleges that Kreloff's signature is on a number of additional notes. According to Marshank's suit, Kreloff's signature authorizes both a housing and automobile allowance for Marshank which New Frontier Media is supposed to have agreed to. The agreements called for New Frontier Media to give Marshank $1,000 per month for housing and a $500-a-month automobile allowance. Marshank also alleges that he was never paid housing [he claims he's owed $6,000] and that New Frontier Media also owes him $3250 for a car allowance.
According to Marshank's suit, New Frontier Media also promised to pay up to $5,000 in moving expenses but only gave him half that amount. Marshank also alleges that Weiner, in a memo dated April 3, 1997, promised a bonus plan as part of an employment compensation package. A bonus was never paid.
In the breach of contract charges, Marshank alleges that he was hired on for a minimum of 18 months and that there were still seven months remaining on his contract. Marshank also alleges that, in Weiner's April 3 memo, he was promised 20,000 warrants to purchase stock in New Frontier Media's acquisition of assets from Fifth Dimension, a Barbados Corporation, and a New Frontier Media subsidiary. Those warrants were never issued, Marshank alleges, making it another enforceable SEC claim, according to him.
Marshank also alleges that Weiner promised 5% commission on shares of New Frontier Media stock which Marshank persuaded friends to buy. Marshank claims the company owes him another $16,500 for that transaction.
New Frontier Media filed answers and affirmative defenses to Marshank's claims in District Court, County of Boulder on Dec. 3, 1998.
For the most part, the company admits having hired Marshank but denies Marshank's allegations and claims regarding bonuses, allowances and compensation packages.
New Frontier Media also alleges that Marshank failed to state facts sufficient to constitute an action against Kreloff and Weiner and failed in his performance of duties for the company. The company also claims that it was fraudulently induced into entering an agreement with Marshank - the same claims issued by them in the J.P. Lipson lawsuit. New Frontier Media also claims that it fired Marshank with "good faith legal justification" and that his suit is "frivolous."
According to New Frontier Media's counter claims, Marshank's terms of employment was on a month-to-month basis, The company is also saying that Marshank misrepresented his abilities to do his job and was derelict in his performance of them.
"After a short time, it became clear that Marshank was incompetent to manage...day-to-day affairs and otherwise act in accordance with his prior representations and promises," New Frontier Media alleges in its counter claim. The company also alleges that it had to hire additional personnel to do what Marshank had been hired to do.
Among other allegations, New Frontier Media states that Marshank was "incompetent" to organize and manage the company's daily affairs; incompetent to manage the company's international affairs; engaged in acts of moral turpitude while on company business in South America and conducted personal business on company time. New Frontier Media also alleges that Marshank's "fraud and deceit" cost them in the neighborhood of $75,000 in sustained damages.
