Palatka firm, Teddy Turner sued in tech dispute
Jacksonville Business Journal - by Jeff Haynes and Mark Larson
The owners of a Palatka technology company have been sued for $3.5 million by a California firm. The suit, filed in federal court in Sacramento also names Ponte Vedra Beach resident Teddy Turner, son of CNN founder Ted Turner, as a defendant.
The legal action was filed by Sacramento-based Level One Communications Inc., which claims it was sold phony technology by Vision Tek of Palatka.
Vision Tek owners Madison and Linda Priest were tracked down by a private investigator and served the lawsuit last week, according to David Tyra, an attorney representing Level One.
The Priests could not be reached for comment.
But Turner, who once was involved in a company that licensed Vision Tek's technology, lashed out at the charges.
"I strongly deny any and all of these allegations and will fight this legal battle very, very hard," he said.
Level One claims it had invested $3.5 million in Zekko Corp., a Ponte Vedra Beach company formerly headed by Turner, to get its hands on technology that could pump vast volumes of video data quickly via copper phone lines and modems.
The lawsuit states Zekko bought an exclusive license for the technology from Vision Tek for $1 million, a minimum 10 percent royalty payment of $500,000 in 1998 and 1999 and 6 percent of the stock in Zekko in a private offering.
Representatives from Level One flew to Ponte Vedra Beach to meet with Turner and the Priests on two occasions in October 1997 to check out Vision Tek's product, according to the lawsuit.
Apparently, Level One was impressed with the technology -- it spent $3.5 million for it.
But Level One is still waiting for plans, schematics, prototypes and patent registrations for the technology and now claims the demonstrations were hoaxes -- a claim Turner described as "absolutely untrue."
Turner, president and chairman of Zekko from December 1997 to September 1998, said the company now belongs to Level One.
"It is a very interesting case, especially since they (Level One) run the company (Zekko)," he said.
Level One officials would not comment on the extent of their ownership of Zekko.
"Level One has been a part-owner ever since it made the investments," attorney Tyra said. "I don't know what percentage (of ownership) it is."
Turner is now chairman of Cedarhurst, N.Y.-based Compu-Dawn and its local subsidiary, e.TV Commerce Inc. E.TV bought the operating assets of Turner's LocalNet Communications Inc. in January.
While Level One states in its suit Turner was present at both demonstrations, the company stops short of saying Turner knew the technology was phony.
But "we wouldn't have named him in the lawsuit if we didn't think he was involved," Tyra said.
A hearing in district court is scheduled for April 19.
Mark Larson is a reporter for Sacramento Business Journal, a sister publication.
