Interactive Brand Development (IBD) will start making First Data Bank payments this Friday in what it hopes will be the biggest statement yet that the company is intent upon pulling a Lazarus act with payment processor iBill.
First Data, iBill’s former credit card processor, will pay out 100 percent of what it is holding in escrow.
IBD, which also owns 35 percent of Penthouse and 25 percent of XTV, has been working toward this moment since it officially took over iBill on January 28. After bringing in restructuring firm Corporate Revitalization Partners (CRP), IBD began a process of cutting staff, office space, and expenditures. Payments to Gkard customers and iBill EU clients soon followed. While the First Data payments do not reflect everything webmasters are owed, it will be the first time those webmasters who logged into their accounts and accepted the company’s settlement have seen a dime since late last year.
“We’ve settled with EU and First Data to the tune of about $21,600,000,” IBD president Gary Spaniak told AVNOnline.com.
“Part of that is from the European processor that is being paid out and has been paid over the last couple weeks. Part of that is the First Data settlement, of which the first payments are going out on Friday from First Data to the webmasters.”
IBD first started paying webmasters for the company’s Gkard Secure solution, a virtual Visa debit/credit card officially launched on February 15. Clients received wire payments on March 15 for the period of February 16 to February 31, and payments have continued every two weeks since. IBD followed up with iBill EU clients, who began receiving their first payments on March 28. Spaniak said that all EU clients billing through Encarta would be paid in full by the end of April. Payments to European check processing customers is still a work in progress, however.
“We do have some check processing customers [that this does not apply to], and we’re working on that,” Spaniak said. “As of April 21, all the check products will go 100 percent secured. We moved everything to secured. I don’t want there to be a question in anybody’s minds. I don’t want to touch their money, as the new company.”
For iBill clients it’s a little trickier though. While the First Data payments are a start, they only represent a portion of what webmasters are owed and IBD does not have the capital to pay everyone in full.
“Some webmasters are going to receive 100 percent of what they’re owed from the First Data settlement. Some webmasters are not,” Spaniak said. “It has nothing to do with us; it has to do with the percentage owed to them by First Data compared to what was owed to them by the old iBill. What we’re offering on the percentage owed by iBill is a promissory note for 100 percent. The goal is to get webmasters 100 cents on the dollar.”
To those ends, IBD is offering other options, starting with a promissory note to pay out 100 percent over two years. Webmasters who find that unsatisfactory can negotiate other settlements, including stock options and warrants.
“I can’t offer everybody a preferred stock situation, but we have some other programs that really can take these dollars and make them into some nice numbers because we have Penthouse and XTV,” Spaniak said.
While the news looks good on the surface, program owners are understandably skeptical.
“It’s good news. I think no one ever thought they were going to see a dime [from iBill], but I’ll wait to see the how it goes first,” BrainCash owner Fred Valiquette told AVNOnline.com.
In the meantime, IBD is dealing with other issues, including several lawsuits filed in Florida’s Broward County. The suits went to hearing April 4 and word from both sides suggests they are close to a settlement.
“At this point in time they have the appearance of acting in good faith and settling our existing lawsuit. They seem to be saying the right things,” a source at one of the companies involved in the litigation told AVNOnline.com.
Spaniak concurred.
“[The lawsuits] won’t be an issue,” he said.
Furthermore, IBD staffers are dealing with a rush of angry webmasters but are working to change the perception about the company.
“The webmasters are so mad. They got so much bullshit from everyone else,” Spaniak said. “If we make a promise you can count on it.
“We’re going to put our money where our mouth is. We’re going to stand by every settlement agreement we make. We’ve got people getting paid on First Data and EU. I think we’re going to have to prove ourselves in the market again. IBD could have bought the assets of iBill, bought the database, changed the name, come out with a brand new company and left everyone else behind. We didn’t want to do that. We think we can show these webmasters that we stepped in when we didn’t have to and we’re going to solve the problems.”
Gone are remnants of the old iBill, including former president Cathy Beardsley and transitional president Charles Prast, whose last day on the job was April 4. Added are in-house legal counsel and an advisor dedicated solely to working out settlements with webmasters.
Additionally, all payments are now secure and IBD is even gearing up to offer webmasters some new services, including a traffic generator.
“The goal is to get the webmasters taken care of and stop pointing the fingers,” Spaniak said. “The reality is, as far as I know, no credit-card data was ever lost or manipulated. We’ve put a ton of money into this company. The credit card data is secure. There’s a lot of frustration out there and hopefully with an open-door policy, I think it will help a lot.”
