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Rentrak Corp. in Legal Spat With Ex-Chief Berger

17 Aug, 2001 By: Joan Villa

Like a marriage gone sour, Rentrak is now trying to recover money itbelieves is owed by former chairman and c.e.o. Ron Berger.

The Rentrak founder was replaced by current c.e.o. Paul Rosenbaum last September when a group of dissident shareholders gained control of the board.

In an amended complaint filed in Circuit Court of the State of Oregon for the County of Multnomah June 15, Rentrak is charging Berger with breach of fiduciary duty in allowing retail chain Video City to incur $12.7 million in debt under Rentrak's retailer loan program, which Rosenbaum discontinued. Rentrak is seeking more than $6 million in damages from Berger after writing off $5.7 million as uncollectible after Video City filed for bankruptcy in August 2000, Rosenbaum says.

Rentrak is also seeking repayment of computer equipment, a company car and stock options granted to the former c.e.o.

The case is in discovery with a trial date set for April 16, 2002, according to Berger, who calls the allegations “preposterous andbaseless.”

Berger has filed a counterclaim for about $1.7 million for Rentrak'scancellation of Berger's options to purchase stock, unpaid wages and compensation, breach of agreement and other charges, according to Rentrak Securities and Exchange Commission filings.

Berger says that “the only motivation I ever had in any of my dealings with Video City and any other client was to maximize the revenues andprofitability and growth of Rentrak Corp. Hindsight is 20-20. In the course of dealing with 12,000 accounts over a 10-year period, Rentrakunder my management made loans and issued credit to numerous clients, some who paid their bills in full, some of whom failed and wentbankrupt.”

Berger says a Rentrak insurance policy indemnifies his actions as c.e.o., “so the irony is if they could beat me and prove I didsomething, their own insurance company would have to pay the claim.”

Despite the squabbling, Berger — now c.e.o. of Figaro's Italian Pizza Inc.in Salem, Ore. — says he bears Rentrak “no ill will.” “I am one of theirlargest shareholders,” he says.

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