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cmtsuit.121712.releasefinal

cmtsuit.121712.releasefinal

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Published by Nitasha Tiku

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Published by: Nitasha Tiku on Dec 17, 2012
Copyright:Attribution Non-commercial

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12/17/2012

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FOR IMMEDIATE RELEASE
CREATIVE MOBILE TECHNOLOGIES, LLC FILES SUIT AGAINST VERIFONESYSTEMS, INC. AND VERIFONE MEDIA, LLC FOR MORE THAN $250 MILLION INDAMAGES RELATED TO CONTRACTUAL BREACHES OF ITS IN-TAXITECHNOLOGY AGREEMENT
 NEW YORK – December 17, 2012 – Creative Mobile Technologies, LLC (CMT), aleading provider of in-taxi media, advertising and payment technology, has filed a civilaction against VeriFone Systems, Inc. (VeriFone) and VeriFone Media, LLC (VMS),seeking damages in excess of $250 million. The suit charges the defendants with“wrongful, malicious, tortious and contractual breaches
”  
of CMT’s agreement with itsexclusive in-taxi advertising partner, VMS, formerly Clear Channel Taxi Media, LLC(CCTM). Among other things, the lawsuit seeks damages arising out of VMS's failure topay CMT in violation of its revenue-sharing obligations under their agreement and for VMS's blatant disregard of CMT's first refusal rights.The lawsuit alleges that VeriFone, including its Chief Executive Officer DouglasBergeron, knew of the existence of the exclusive agreement between CMT and CCTMwhen VeriFone purchased CCTM in 2009 and that VeriFone specifically acknowledgedits subsidiary’s obligations under the agreement and said that those obligations would behonored. Despite these assurances, the lawsuit alleges that VeriFone, a competitor toCMT, employed a combination of bad faith dealing and other tactics that caused VMS tobreach the agreement in numerous ways. Among other things, the lawsuit alleges thatVMS withheld financial information from CMT, delayed payments to CMT for certainadvertising, refused to pay CMT for other advertising, and violated the agreement’sbroad rights of first refusal by installing similar technology and placing advertisements intaxis outside of New York City without first offering those opportunities to CMT asrequired under the agreement. Such locations include Miami, Las Vegas, Atlanta, SanFrancisco, South Africa, and London.The action was filed in the New York State Supreme Court in Manhattan by CMT’sattorneys Skadden, Arps, Slate, Meagher & Flom LLP and co-counsel Rosenberg,Calica & Birney LLP. John L. Gardiner, partner at Skadden and co-head of the firm’sInternational Litigation and Arbitration Group, is the lead attorney on the case. He said:“As alleged in the complaint, while our client fully and faithfully performed its obligationsunder the agreement with VMS, even after VMS was acquired by VeriFone, VeriFoneintentionally and maliciously caused its subsidiary VMS to violate its contractualobligations to CMT, causing severe damage to CMT, damage that CMT believes to be inexcess of a quarter of a billion dollars. CMT intends to pursue its legal rights under theagreement with VMS."
Background
When CMT was founded in 2005, the company pioneered new technologies to complywith New York City’s taxi service enhancement needs, developing the Passenger Information Monitor (PIM), which made the unprecedented in-taxi advertising platformpossible. CMT’s sales partner was CCTM with whom the technology company hadentered into an exclusive Sales Representation Agreement starting in March 2006. CMTbore the financial burden of development, acquisition, and installation of all the in-vehicle

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