NEWS5 May 2010

OTX hits back at co-founder Luck’s claims for acquisition payout

Legal North America

US— OTX is demanding a jury trial over co-founder Kirstin Luck’s claim that she is owed money in connection with OTX’s recent sale to Ipsos for $71m – claims the company denies.

Luck filed a complaint with the courts on 8 March, claiming that her stake in a company incentive award programme entitled her to a payout in the event of a sale of the company. Luck also claimed to be owed $82,250 of an agreed $246,750 settlement payout following her “termination without cause” on 16 December 2005.

In answering Luck’s complaint, OTX said it had paid her “all amounts currently due” for the vested portion of her incentive award agreement: that is $11,300 in connection with Ipsos’s $60m upfront payment, with the prospect of an additional $5,700 should Ipsos make a scheduled deferred payment of $11m in two years’ time.

Court filings show Luck first wrote to OTX on 18 February to demand payment under the incentive award agreement, but this was “before any payment was due”, according to OTX. Despite the agreement with Ipsos having been signed in January, the acquisition itself did not occur until 12 March, say the firm’s lawyers.

In issuing the payment to Luck on 11 April, OTX’s counsel wrote to “urge her to dismiss her entire action”, warning that if she did not OTX would respond with a cross-complaint seeking the return of the money already paid to Luck under the terms of her settlement agreement and general release.

Documents filed with the court include a letter dated 25 August 2006 sent from OTX to Luck explaining that the company would not pay all that was due under the settlement agreement as Luck had allegedly breached its terms – though at that time OTX did not seek to recoup payments already made.

Luck worked for OTX for more than five years, from June 2000, and was latterly executive vice president of operations and corporate strategy.

After leaving the firm she set up Forefront Consulting Group, a research services advisory firm. That business was later acquired by survey programming and reporting specialist Decipher, where Luck currently works as president.