We come to the year 2000 in our countdown through 20 years of the Legal IT Insider and this year there was just one big story: how a merger between two major tech vendors fell to pieces when it was revealed the CEO of one company had a criminal record for possessing drugs – a lot of drugs…
In early January 2000, Solution 6 Holdings (the Australian-based software group that the previous year had purchased the CMS Open business – the legal PMS that would later become Aderant Expert) had opened negotiations to buy the Elite Information Group (the company behind the Elite Enterprise PMS).
Unfortunately the negotiations soon became bogged down in regulatory issues with the US Federal Trade Commission saying it planned to challenge the merger on the grounds that it would be uncompetitive to have two of the largest players in the US legal systems market controlled by the same group. For their part Elite and Solution 6 argued that the merger would be “pro-competitive and in the interest of customers and shareholders.” (Hmmm not sure how that argument would have ever worked except for the shareholders.)
Negotiations dragged on over the first five months of the year and in May, after numerous deadline extensions, the board of Elite announced it was exercising its right to terminate the pending merger agreement. (Elite would subsequently be acquired by Thomson Reuters but that is another story.)
Elite’s then CEO Chris Poole said the FTC objections were regrettable but went on to say the prolonged merger talks had become a distraction and that the company now needed to focus on its customers and business plans. However the final weeks of the merger talks had also revealed another reason, besides the FTC, why Elite was so keen to draw line under the talks.
Following months of rumours, adverse press comments and the collapse of another Solution 6 takeover deal (the latter with another Australian software business) the then CEO of Solution 6 – Chris Tyler – held a press conference to “set the record straight” about his personal history.
He admitted involvement in a failed Canadian video production company in the early 1990s and then, going a little further back in time, also said it was true that in 1985 he was convicted for “possession of between 50 and 200 pounds of marijuana” by a Texas court and given a 10-year suspended jail sentence.
“At the time,” said Tyler, “I was running a nightclub and marijuana was very much part of the social and recreation scene. I was caught. I shouldn’t have done it. It is a matter that is very much a distant part of my past.”
But not distant enough. One week later he “by mutual agreement, retired from Solution 6 with immediate effect” – and the company’s share price promptly rose.
Neil Gamble, the replacemewnt CEO of Solution 6 Holdings would later describe the year 2000 as “eventful year”.