Telecom, software company in High Court; IP disputed in $10.5m collapse

Telecom has applied for a High Court injunction to stop the sale of Aldous, the software company which created its point-of-sale and retail phone provisioning software.

Auckland-based Aldous went into receivership on April 13, owing at least $8.76 million to secured creditors, $1.6 million to unsecured creditors, $318,000 to IRD and $353,000 wages to owed to 16 staff (14 in Auckland and two in Melbourne).

Receiver Stephen Lawrence, of PKF Corporate Recovery & Insolvency, told NBR ONLINE a tender process saw eight potential buyers emerge for Aldous, whose major clients were Telecom, Telecom division Gen-i and Telstra. However, there were no offers on the table.

A sale could not proceed until the ownership of Aldous’ intellectual property was resolved.

Telecom spokesman Mike Burgess told NBR the the software code in displute "forms an application that is used at point of sale with our retail partners. It allows our retail stores to interact with the Telecom provisioning systems so that customers can purchase and connect mobile phones."

Mr Lawrence emphasised that Telecom's claim was only over a part of Aldous' intellectual property.

Telecom's Mr Burgess said his company was seeking to “maintain the status quo” – in its view, that it owns the intellectual property rights to the software it commissioned from Aldous. 

His company wanted to "ensure intellectual property that Telecom owns is not put out of Telecom’s control" though the sale of Aldous until the question of who owned the intellectual property could be resolved.

In the balance
Justice Mary Peters reserved her decision.

Mr Lawrence said an important principle of intellectual property ownership was at stake. He expected the court to take some time to reach a decision.

Path to collapse
The first receiver's report does not place a value on Aldous’ intellectual property.

It does note that the receivers understand the amount owed to secured creditors is “significantly higher” than the $8.76 million tallied so far. Mr Lawrence said today that the amount was still unknown.

Additionally, Aldous is owed $1.2 million by one of its directors, Morris Hodges, the report says.

Mr Hodges has disputed the claim.

Mr Lawrence said Aldous continued to service Telecom for a time after going into receivership, but has now ceased trading.

The immediate cause of Aldous' collapse was the failure of a negotiations with an un-named overseas phone company, which the company's major backer, British investor Jurek Piasecki, had hoped would become a major client. With the collapse of the deal, Mr Piasecki decided not to put any more funds into the company.

Aldous' website lists a number of clients, including Telecom, Telstra and US carrier Verizon. It also says Aldous had - or had - a number of un-named European and Asia-Pacific telco customers. 

However, Mr Lawrence described Telecom as Aldous' "major client."