ArtistDirect Buying Back Stock
ArtistDirect Inc., the financially struggling Los Angeles dot-com music firm, said it would buy back more than 7.5 million shares of its common stock and unexercised options to satisfy regulatory requirements.
The company's stock price closed below $1 a share for the 30th consecutive day last week, triggering an automatic warning that it is in jeopardy of being delisted from Nasdaq.
ArtistDirect provides music and multimedia content through its myriad Web sites and builds e-commerce shops for dozens of well-known acts, such as the Backstreet Boys, Rolling Stones and No Doubt.
ArtistDirect said it is offering to repurchase 585,724 shares it issued to artists and managers, and another 7 million in unexercised stock options.
The company which recently fired 30 people, or 12 percent of its staff, as part of a corporate restructuring estimates that the buyback will cost about $10.2 million if all targeted shares are repurchased.
The company's stock price has plummeted more than 93 percent since its initial public offering in March.
Taxing Times for Travolta
Actor John Travolta will pay $607,400 in back taxes to settle an Internal Revenue Service dispute dating back more than five years.
Under a two-page settlement filed in U.S. Tax Court, Travolta will pay more than half the $1.1 million in back taxes and penalties sought by the IRS for the years 1993 through 1995.
Travolta agreed to pay only back taxes, not any penalties, records show. The amounts are $150,547 for 1993, $248,096 for 1994 and $208,757 for 1995.
The dispute stemmed from $2.27 million in unspecified losses that Travolta claimed from 1993 to 1995 for a company called ATLO Inc., according to court records. ATLO is a so-called S corporation, a common device wealthy people use to gain tax breaks by having earnings and losses flow through the companies.
CarsDirect Sues Software Maker
CarsDirect.com filed a lawsuit claiming KPMG Consulting Inc. knowingly misled it about untested customer-tracking software that has cost the online auto store more than $50 million.
The suit, filed in Los Angeles Superior Court, offers a look at closely held CarsDirect.com, which dismissed 90 of its 750 employees in November. KPMG said the suit is without merit and it plans to vigorously defend itself.
The suit says that in late 1999, KPMG advised CarsDirect to replace its customer-tracking software with a more sophisticated system that could better handle increased online traffic. The system did not work as well as CarsDirect's old software, which had been developed by outside programmers, according to the lawsuit.
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