Charlie Morgenstern 11 a.m., May 24
The months leading up to the purchase of UT San Diego were not easy on John Lynch, UT's CEO, involved in two costly lawsuits
For John Lynch, chief executive officer for the UT San Diego and soon to be head of the North County Times, the year leading up to purchase of the Union Tribune appeared to be a rough year, financially.
During that time, Lynch was involved in two separate lawsuits for more than $175,000 in damages.
As we reported earlier this week, in March 2010, Lynch settled with American Express Centurion Bank in the sum of $44,051.83 for defaulting on his American Express credit card. Commenting on the lawsuit, Lynch said the dispute was "over a large incorrect charge" and that the balance has since been paid.
But that wasn't the only hit to Lynch and his bank account.
Just two months prior to the March settlement, Lynch was slapped with another lawsuit. In that case T.C. Lawson Marketing, LTD., a company that he had contracted with while serving as chairman of Tag Digital Media, sued Lynch and his troubled company for $125,100.
The lawsuit stemmed from a 2008 purchase agreement between Tag Digital Media and T.C. Lawson Marketing. The deal consisted of Tag Digital Media purchasing 6.5 million compact discs at a cost of $.16 per disc for use at photo-cd project stations in Wal-Marts.
One month after placing that order, Lynch wrote a letter to the Hong Kong-based marketing outfit personally guaranteeing that he and his company were good for the $1.04 million contract.
"The purpose of this letter is for me to offer my personal guarantee that this amount will be paid as follows," reads the October 16 letter from Lynch.
"Tag will provide a down payment in the amount of $160,000 on or about October 20 by providing a letter of credit for the initial shipment of CD's...
"In addition, I will personally guarantee that this payment will be made. If Tag [Digital Media] is unable or unwilling to pay this obligation, then I will pay it from my personal funds.
"Attached is my personal financial statement showing that I have the ability to fulfill this obligation should it become necessary."
Despite his personal assurances, the marketing firm did not receive the entire amount. Eight months after writing that letter, Tag Digital Media still owed $125,100 owed. For the next three months, representatives from Hong Kong tried unsuccessfully to collect the balance. It was then they turned to the courts.
On January 25, 2010, a registered process server from American Messenger Service attempted to serve Lynch with the summons and complaint to an office at 3655 Nobel Drive.
"Neither John T. Lynch, not Tag Digital Media, are on the directory," wrote the messenger. "
Nearly one month later, armed with a new address, the messenger gave it another go, but again with the same results.
"Attempted service at business location -- informed by [a client] that Tag Digital Media has not been in the building since November 2009."
After another failed attempt, the messenger served a person affiliated with the company.
One year later, six months before the purchase of the Union Tribune was finalized, the judgement for T.C. Lawson Marketing was finalized in the amount of $138,889.68.
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