Failed Dot-Com Claims NBC Reneged


NEW YORK — Medical Self Care Inc., a former online retailer of health products, has filed a lawsuit claiming NBC breached an agreement to invest $10 million in its Internet business.

SelfCare, which ceased operations in January, said it began discussions with General Electric Co.’s (GE) NBC unit in December 1999, when the “Internet boom” was in full swing and traditional media players were seeking to establish presences on the Web.

SelfCare sold allergy-free bedding, blood-pressure monitors and spa and skin-care products through the Internet. The company said it signed an agreement with NBC in February 2000, under which it received $1 million in cash and NBC received an equity stake in SelfCare. The balance of NBC’s investment, about $9 million, was to be paid in guaranteed advertising time, SelfCare said in the suit.

But by last summer, SelfCare said it needed additional capital as a result of the market selloff. The company says it received approval from NBC to sell the advertising time for cash.

Later, however, NBC allegedly refused to approve SelfCare’s arrangement to sell the advertising time to ConAgra Foods Inc. (CAG), according to the suit. SelfCare says it never televised its own advertisements or received any benefit from the promised advertising time.

SelfCare attorney David C. Wrobel suggested NBC lost interest in its investment when SelfCare fell on hard times.

The Emeryville, Calif., company transferred its assets to Development Specialists Inc. in December under a liquidation proceeding.

“This was a bet on a dot-com that turned sour, but NBC still is obligated to pay what it promised,” he said.

NBC, on the other hand, says it honored its agreement with SelfCare. “The company, like many dot-com companies, fell on unfortunate times,” an NBC spokeswoman said. “They’re now trying to recapture some of their losses through this meritless lawsuit.”

The suit seeks $9 million in damages from NBC.

Copyright (c) 2001 Dow Jones & Company, Inc.