Shareholder Files Action Against NorthPoint

Troubled data CLEC continues to battle its way through litigious waters. No news of a cash-rich buyer in sight to save the beleaguered DSL provider from looming financial ruin.

by Michael Singer of siliconvalley.internet.com [December 21, 2000]

A shareholder with NorthPoint Communications filed a purported derivative action against the company and its directors Monday in California State Court in San Francisco.

The complaint alleges breach of fiduciary duty, waste of corporate assets, constructive fraud, gross mismanagement and breach of contract during the period from August 7, 2000 to November 29, 2000 based primarily on alleged failures of disclosure.

The company did not issue a statement, saying only that it had "just received a copy of the complaint" and that "based on its review to date, the Company believes that the case is entirely without merit."

Earlier this month NorthPoint got into its own legal wrangling when it sued Verizon Communications over a lost a merger deal.

NorthPoint (NASDAQ: NPNT) has about 133 million outstanding shares and currently operates DSL-based local networks in 109 U.S. cities.

Shares of NorthPoint dropped 15 percent at the close of trading Monday to a half-cent.

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