Litigants respond to allegations in PurchasePro lawsuit

Wednesday, June 13, 2001 | 10:56 a.m.

Las Vegas-based PurchasePro and its founder are being sued not by a convicted felon, but by the shareholders of All Creative Technologies Inc. for allegedly stealing corporate secrets, ACT says.

All Creative Technologies, which ceased operations in January 1996, named PurchasePro founder Charles "Junior" Johnson and Ranel Erickson, another former PurchasePro executive, as defendants in a February lawsuit.

All Creative Technologies' suit claims Johnson obtained the company's business plan while allegedly working as an executive for All Creative Technologies and used the information to launch PurchasePro in October 1996.

PurchasePro has disputed that Johnson ever worked for All Creative Technologies, claiming Johnson was merely an investor in the now-defunct company.

Shortly after the suit was filed, PurchasePro said convicted felon Russell Pike, All Creative's ex-president, was behind the lawsuit. Pike is in prison for bank fraud.

But in court documents filed in April by All Creative Technologies' lawyers, All Creative states that Russell Pike did not bring the suit. Instead, it was brought by All Creative Technologies' 80 shareholders.

"While its true that Russell Pike is in prison, ACT and its shareholders were not Pike's confederates -- but his victims," the suit states.

PurchasePro develops marketplaces that allow businesses to buy and sell products online. All Creative Technologies claims in its suit that it developed the "e-marketplace" concept in 1995.

Johnson, who resigned from PurchasePro in May, filed the most recent response to All Creative's lawsuit May 25 denying the charges.

Johnson departed the software company after a troubling first quarter for PurchasePro that was plagued by accounting debacles. The company was forced to revise its earnings downward twice. The initial earnings report released April 26 already badly missed analysts' estimates.

A flood of other lawsuits have since been filed by disgruntled investors against Johnson and PurchasePro for allegedly making false statements about the company's financial status to artificially inflate its stock price.