BBOX Black Box Corp.

David v. Goliath Revisited; Allcom Electric's Owners, Marino and Petersen, Prevail in Black Box Arbitration, Are Awarded Attorneys' Fees NEW YORK, March 23 /PRNewswire/ -- In a classic match up of right vs. might, Edward J. Marino and Thomas J. Petersen, one-time owners of Allcom Electric, Inc., and their former Chief Financial Officer, Edward Johnston, earned a decisive victory in arbitration with infrastructure services giant Black Box Corporation of Pittsburgh. The matter was decided by Donald Ziegler, former chief judge of the U.S. District Court for the Western District of Pennsylvania, under the auspices of the American Arbitration Association. Mr. Petersen who resides in Upper Saddle River, NJ, was represented by Donna M. Doblick, an attorney at Reed Smith LLP, Pittsburgh. "I am very gratified, but not surprised, by the vindication represented by this decision, which is overwhelmingly in our favor on all counts," said Mr. Petersen. "Every one of the allegations Black Box managementmade has been thoroughly examined by Mr. Ziegler and found to be completely without merit. I believe this ruling will go far in restoring the excellent reputation we and our company enjoyed prior to becoming a part of their organization." Allcom Electric, Inc., founded in 1993 in New York City by Mr. Marino, provided electrical and cabling design, installation and maintenance services. With sales exceeding $20 million annually, Allcom was acquired by Black Box in mid-2000 with high expectations for the merger's success in the period's very dynamic New York market. After a series of missteps on the part of Black Box, however, Allcom was closed in 2003, amidst unfounded allegations circulated by Black Box that Mr. Petersen, Mr. Marino and Mr. Johnston were responsible for the company's failure. Black Box unsuccessfully sued to rescind the purchase, erroneously alleging that Mr. Petersen and Mr. Marino had induced Black Box into purchasing Allcom by misrepresenting the estimated profitability of certain jobs, misrepresenting the profitability of the company as a whole, and misrepresenting the "earned not billed" amounts of other jobs. Black Box also unsuccessfully and erroneously claimed that Mr. Petersen and Mr. Marino's affiliation with the employment service company known as Crafted Resources violated their non-competition agreements with Black Box. The late December 2003 arbitration decision tells a very different and more truthful tale. Mr. Ziegler wrote, "the demise of Allcom had little to do with the alleged errors and omissions of respondents (Petersen, Marino and Johnston), and much to do with the errors and omissions of Black Box." Mr. Ziegler specifically detailed five specific errors and omissions made by Black Box, including acquiring another company known as InTec without adequate due diligence and combining the books and records of InTec with those of Allcom. He also noted that Black Box failed to establish a corporate chain of command in New York, failed to resolve a billing dispute with Goldman Sachs and withdrew from Allcom's high voltage electric market, which had been Allcom's strength in the New York market. "These systemic handicaps, coupled with external market conditions provided the end-game for Allcom," Mr. Ziegler wrote. On March 1, 2004, Arbitrator Ziegler also ordered Black Box to reimburse Messrs. Petersen, Marino, and Johnston for the more than $1 million in legal fees and expenses they incurred defending against Black Box's allegations. "I am pleased that this matter is over," said Mr. Petersen. "It's always difficult for individuals to defend themselves against a major corporation, but when you've got the truth on your side, that's a powerful weapon." Mr. Petersen also observed that it was "a shame to see a company that was poised to do great things get dragged down by poor leadership, as Arbitrator Ziegler appreciated was the case here." DATASOURCE: Thomas J. Petersen CONTACT: newsPRos: +1-201-493-1027, for Thomas J. Petersen x

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