Status: True. Origins: On 21 October 2003, X10 Wireless Technology — familiar to countless Internet users as sellers of miniature wireless cameras — filed for Chapter 11 bankruptcy protection in U.S. District Court. Their bankruptcy filing came just two weeks after a Superior Court jury in Santa Ana, California, ordered them to pay $4.3 million in damages to three brothers who claimed that X10 failed to pay $564,000 in commissions and stole their proprietary technology and business model. X10's bankruptcy filing also left a variety of web publishers, including major sites such as AOL, Microsoft, FOX News, Google, eBay, and Yahoo, holding the bag for their advertising costs and other unpaid revenues. Only days after X10's bankruptcy filing, we received an e-mail solicitation from one of their sales reps inquiring about placing advertising on our web site: From: paull@x10.com Sent: Friday, October 31, 2003 12:51 PM Good morning, I represent a company named X10, a manufacturer of an array of wireless products including cameras, stereo equipment, etc. Because we have seen the value of the Internet thru many buys, we are currently looking to purchase more space in the form of pop-unders, banners, textlinks, on exit pops and emails. I came across snopes.com and am interested in speaking to someone at your company about advertising opportunities. Please contact me so we can discuss how we can work together. Thank you in advance and I look forward to speaking to you. This solicitation in itself wasn't so unusual. Companies don't necessarily close up shop and go away after declaring bankruptcy — the point of a Chapter 11 filing is to allow a financially troubled company to reorganize and continue conducting business while its operations are overseen by a bankruptcy court. The alarming issue here is that we'd already had business dealings with X10, and they were far from satisfactory. We displayed over 2 million of their ads to our site's readers earlier in the year, and X10 paid us absolutely nothing in return. When we pressed for payment, X10 representatives made excuses, dissembled, lied, tried to evade paying us by imposing terms which were not part of the original contract, and attempted to extort us into running even more of their advertising (at cut-rate prices) as a condition of recovering a fraction of the money they already owed us. And this reprehensible behavior all took place well before X10 declared bankruptcy. Based on our experience, we'd strongly recommend to other web publishers that they not accept any advertising for X10 Wireless Technology. Last updated: 24 November 2003
Origins: On
From: paull@x10.com Sent: Friday, October 31, 2003 12:51 PM Good morning, I represent a company named X10, a manufacturer of an array of wireless products including cameras, stereo equipment, etc. Because we have seen the value of the Internet thru many buys, we are currently looking to purchase more space in the form of pop-unders, banners, textlinks, on exit pops and emails. I came across snopes.com and am interested in speaking to someone at your company about advertising opportunities. Please contact me so we can discuss how we can work together. Thank you in advance and I look forward to speaking to you.
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