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Brothers Battle Over High-Speed Internet System in Utah

Posted on: Wednesday, 20 July 2005, 21:00 CDT

Jul. 20--The future expansion of a promising, ultra high-speed wireless Internet system could be imperiled by dueling lawsuits brought by the two brothers who built the company.

At stake in their 3rd District Court complaints is whether the Mobile Wireless Mesh Network, currently serving 1,000 customers in St. George, will be able to achieve its goal of providing a suite of broadband-powered Internet access, telephone, video-on-demand, television and home security services to Utahns statewide.

Heritage Communications Inc. founder David Thayne claims his younger brother, Timothy Thayne, along with several investment consultants and up to 100 unidentified co-defendants, are responsible for failed fundraising efforts, questionable stock dealings and an alleged illegal management coup.

He seeks $120 million in actual and punitive damages, along with court costs and attorneys' fees.

In their $2.5 million counterclaim, Timothy Thayne, president and chief executive of Heritage's parent CoConnect Inc., and his co-defendants counter that leadership changes were properly made, and argue fundraising brought in $3 million to help launch Heritage's proprietary Mobile Wireless Mesh Network.

Heritage attorney Brian Steffensen does not question that $3 million was raised, but claims that amount was $2 million short of what was initially proposed and accepted by all parties. It is that gap in funding that threatens the plan to expand north into major Wasatch Front population centers.

Complicating the scenario Tuesday was CoConnect's and Timothy Thayne's motion to disqualify Steffensen from representing Heritage due to conflicts of interest. The motion, filed before Judge Timothy Hanson, notes that Steffensen recently has counseled CoConnect, and holds 30 million shares of Heritage stock.

Steffensen will fight the motion, dismissing it as an effort to force Heritage to hire more expensive, outside counsel and to deny him, in effect, the right to represent his own interests as a shareholder.

Attempts to reach David Thayne for comment Tuesday failed. A relative answering his Orem telephone said Thayne was out of town on vacation for a week.

Tim Thayne vowed to continue the legal fight to a conclusion, and lamented the rift the dispute has caused within his family.

He said that when he joined David Thayne at Heritage three years ago, it seemed a perfect match of the elder brother's hardware engineering skills and his own software development abilities.

"We were in this together, shoulder to shoulder, for three years. Now, we aren't talking to each other," Timothy Thayne said. "I never wanted things to turn out like they have."

BEHIND THE BROUHAHA:

--The lawsuit: David and Timothy Thayne are battling for control of a new high-speed broadband service.

--At stake: Along with control of the wireless services now being offered only in St. George, future expansion of the Mobile Wireless Mesh Network to Salt Lake City and other Wasatch Front population centers.

--About the disputed network: CoConnect offers St. George residents a web of wireless "nodes" to create a network boasting broadband speeds of up to 45 megabits per second -- potentially faster than dialup access.

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Copyright (c) 2005, The Salt Lake Tribune

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Source: The Salt Lake Tribune

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