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New York, New York
March 23, 1999
In a lawsuit filed today in Federal Court in Uniondale, New York, the former owners of Support Net, Inc., an Indianapolis distributor of IBM mid-range and main frame computer systems and peripherals, sued Arrow Electronics, its subsidiary Gates/Arrow, and their senior officers and directors claiming that the former were defrauded in the sale of Support Net to Arrow. Plaintiffs allege fraud in the inducement, breach of fiduciary duty and corporate squeeze out, breach of contract, and wrongful denial of access to corporate information and seek $162 million in compensatory damages and $300 million in punitive damages. Plaintiffs also seek a preliminary and permanent injunction preventing Arrow from selling Gates/Arrow or Support Net until defendants have provided plaintiffs with certain financial information.
The complaint arises out of Arrow's acquisition of Support Net in December 1997. Support Net was ranked the fastest growing private company in Indiana by the Indianapolis Business Journal in 1997 and Inc. Magazine identified Support Net as one of the fastest growing companies in the United States. Support Net's revenues in 1997 exceeded $290 million and its President, Henry Camferdam, Jr., was named one of the Ernst & Young Entrepreneurs of the Year in 1998.
Upon filing the complaint, Mr. Camferdam stated: "It is unfortunate that the sale of our business has resulted in this dispute. We hope that our differences can be amicably resolved in the short term."
For more information, contact Blair C. Fensterstock, Esq., Fensterstock & Partners, LLP (212) 785-4100.