Networx Sale: Yes, No, or Maybe?
by Chris Davis
BY CHRIS DAVIS | JULY 6, 2007
After a long, often heated meeting, MLGW’s board of Governors voted two to one (with one abstention) to approve a resolution to sell Memphis Networx to the Denver-based holding company Communication Infrastructure Investments (CII). The votes to sell were cast by board chair Rick Masson, and Nick Clark. V. Lynn Evans voted no; William Taylor abstained.
Clark also serves on the board of Memphis Networx, which had previously signed a binding agreement with CII.
In spite of the vote to approve Networx sale, the process is hardly over. A legal suit filed by one of the jilted bidders, American Fiber Systems, seeks a declaratory action to determine whether or not the Memphis City Council is required to approve the Networx sale.
According to the agreement between CII and Networx the agreed upon price will drop by $1-million should City Council approval be required. When asked if CII would eliminate the “haircut” clause, representative John Scarano appeared to be flummoxed and said, “I’ve never negotiated a contract in public before.”
At meetings end the MLGW board appeared unanimous in its decision that the process leading up to the sale had been imperfect, but, as various board members noted, “it’s an imperfect world.”
Networx CEO Dan Platko and McLean Group consultant Tom Swanson answered some of The Flyer’s questions regarding conflicts of interest. Swanson and Platko were once mutually employed at Intira, a company co-founded by former Networx CEO Mark Ivie. Platko initially hired Swanson, not through The McLean Group, but through Swanson’s private company TJSwansonCo. A contract signed by Platko suggests that the consultant was initially offered $2000/day for his services.
“I haven’t talked to Mark Ivie since 1999,” Swanson said, adding that he hadn’t done business with Platko since they were employed at Intira.
“And I don’t live in Denver,” Platko stated. The Flyer has previously noted that Platko’s linkedin.com profile lists him as a resident of the greater Denver area. The rest of Platko’s information appears to be current. Although he is the top executive for Memphis Networx Platko lives in Atlanta.
Platko and Swanson have offered to answer any additional questions. A more complete interview is presently in the works.
For a comprehensive take on what transpired over the course of yesterday’s meeting click here.
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