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ThoughtWorks Responds to $43M Lawsuit Rumours

by Floyd Marinescu on Jul 10, 2006 |
"We are not for sale; we are not closing our doors," was the message InfoQ recieved in an exclusive late night briefing with ThoughtWorks VP Bill Kimmel in response to rumours circulating after a  DowJones Newswire article released on Friday. ThoughtWorks, the respected consultancy that is home to a number of industry thought leaders (including Martin Fowler) and the source of a number of key open source initiatives, has for the last 3 years been in negotiations in and out of court over a $43M redemption obligation to SV Investment Partners, a VC who invested in ThoughtWorks in 2000, with the expectation of an IPO that never materialized because of the dot com bust. The terms of SV's investment allowed them to have their investment bought back should the IPO not happen within 5 years.

The article, which is for private DowJones subscribers and cannot be republished, claimed that a recent court ruling forced ThoughtWorks to pay the $43M. As a result, rumours have been circulating that the 800 employee company would have to sell itself in order to raise the funds.  According to Bill Kimmel, the recent court battle was in fact not over the amount of the $43M redemption obligation (that's old news); it was about "getting clarification around how the redemption payments happen". Bill went on "this is an ongoing negotiation with SV, and there is no specific issue at this point that has any impact on our ongoing operations."  SV cannot force ThoughtWorks to sell, and negotiations are continuing about how the shares will be redeemed.

In a press release put out today, ThoughtWorks said that the last 6 months have been among the most successful in the company's history and that they are on track to exceed $110 million in revenue in 2006. The company has also opened offices recently in Beijing, China, and Toronto, Canada.

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Watch this space by Michael Burke

Should be interesting to watch this play out. There's nothing of substance in the above 'briefing', just an attempt at damage control:

- last 6 months 'among' the best

- "there is no specific issue at this point that has any impact on our ongoing operations"

- 'on track to exceed $110 million in revenue' - means nothing without an idea of overheads and current debt (above the $43m mentioned)

The only other info I can find on this story is the following anonymous rumour portal:

www.tmronline.com/A55951/tmrarticles.nsf/e17dd6...

Re: Watch this space by Floyd Marinescu

Indeed, there isn't anything of substance in the link to The May Report site either. I didn't originally include it because they illegally republished the DJN article (violated DJ's copyright), plus the article itself was inaccurate and sensationalist, whereas this 'briefing' was just the boring truth.

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