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Fullplay's CEO says lawsuits forced company to file Chapter 11

March 25, 2003

BELLEVUE, Wash. -- Fullplay Media Systems filed for Chapter 11 bankruptcy protection on March 19 because it has been "deluged with lawsuits," Chief Executive Dennis Tevlin told the Seattle Times.

(See related story KioskCom award nominee files for Chapter 11)

According to Tevlin, the lawsuits have made it difficult for Fullplay to raise cash. He said the bankruptcy filing, which essentially puts the lawsuits on hold, will give it time to work out legal issues.

"It was absolutely a defensive move," Tevlin said. "This threat of litigation has been a cloud hanging over us."

The company's flagship product, a multimedia kiosk that allows customers to preview compact discs, DVDs and video games, is a nominee for the upcoming 2003 KioskCom awards in Las Vegas, in the Best Hospitality/Entertainment Kiosk Application category

Fullplay is running out of money and laid off 10 people in February, Tevlin said. Fifteen employees remain.

One of its lawsuits was filed by its biggest customer, Trans World Entertainment, which purchased 16,000 kiosks from Fullplay last year. Earlier this month, Albany, N.Y.-based Trans World sued Fullplay for violating its contract by selling the technology to others. Fullplay, which is working on a sales deal with electronics retailer Best Buy, has countersued Trans World.

The company also is being sued for patent infringement by Florida technology company Barpoint.com. And two of Fullplay's founders are appealing a judge's dismissal of their claims that Fullplay fraudulently induced them to sell the majority of their shares back to the company, Tevlin told the Times.