Protection One sues Criticom over contracts

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Friday, August 1, 2003

ALBANY, N.Y. - Criticom and Protection One Alarm Monitoring Inc. are currently engaged in a court battle over monitoring accounts both companies purchased from the same seller.

According to Integrated Alarm Services Group’s (Criticom’s parent company) amended S-1 filing, Criticom purchased a number of monitoring contracts from B&D Advertising Corp., which had previously sold alarm monitoring contracts to Protection One. As part of the deal with Protection One, B&D agreed not to solicit any customers whose contracts had been purchased, and to keep certain information confidential.

Protection One filed suit in March 2002 in the Superior Court of New Jersey, Camden County, claiming that Criticom’s subsequent purchase of contracts constitutes tortuous interference, that Criticom used confidential information belonging to Protection One and that Protection One had an interest in some of the contracts Criticom purchased from B&D.

Attorney Les Gold of Los Angeles firm Mitchell, Silberberg & Knupp, who has at times worked for both companies, said he was not familiar with the specific suit, but that he has seen similar cases in his career.

“This has come up on occasion. We have been involved in a number of lawsuits where someone has sold the same account twice, which, if that is what has occurred, is unethical or illegal to say the least,” he said. “If that occurs, why they would go after the second buyer I don’t know, unless they’ve alleged that the second buyer had some knowledge of it.”

If there was indeed an existing agreement between B&D and Protection One, Gold said it appears Protection One is going after the wrong party in this lawsuit.

“The culprit is probably the one that should be sued, but you wonder what their resources are,” he said. “I would surmise that B&D doesn’t have deep enough pockets to go after.”

Jocelyn Knief of Criticom deferred comment on the lawsuit to what was contained in the company’s filing, in which it stated its intent to “vigorously defend” Protection One’s claims. The company also said the resolution of this matter would not have an adverse effect on its financial condition.

Robin Lampe of Protection One’s corporate communication office said it would not be appropriate for the company to comment publicly about this case, as it is currently pending, but that there may come a time in the future when Protection One would be willing to discuss the details of the lawsuit.