InformationWeek

November 10, 1997

Former Execs Settle Suit With Uarco

Consulting venture to implement Baan

urning IT skills gained on the job into a consulting business is a common dream. Convergent Solutions Inc. is one such dream come true, but for a while the dream looked more like a nightmare.

Five former IS managers of Uarco Inc., a Barrington, Ill., business-forms company, this month left Uarco to form Convergent. Their company will offer implementation services for Baan Co.'s applications to midsize manufacturers. But at the same time, the five managers also settled a $150 million lawsuit they had filed against Uarco, alleging it improperly tried to prevent them from securing funding for Convergent.

The lawsuit was filed Oct. 3, when the five resigned from Uarco; it sought $150 million in damages and a halt to alleged interference by Uarco in the five managers' efforts to obtain $6 million i n financing.

According to the suit, Uarco originally encouraged Stephen Balow, then its senior VP of technology, to establish a consultancy that could sell services to Uarco. But, the lawsuit continues, Uarco executives balked when Balow presented a list of 32 Uarco employees he wanted to hire.

The lawsuit alleged Uarco then told a potential investor that Balow was not authorized to establish a consulting firm. A source at Baan says Baan's investment arm was that investor, and also says Baan backed out when it saw bad blood developing between Uarco and Balow.

The four other Convergent employees are Kimberly Gable, Karl Gouverneur, Michael Merfeld, and Mark Redshaw. Balow, Gouverneur, and Merfeld were hired several years ago from Ernst & Young to carry out Uarco's implementation of Baan software (see related story, " Apps In Fine Form "). That Baan system was apparently not an issue in the suit. "The Baan system is up and running, and we are very happy with our rela tionship with Baan," says Joseph Kreiner, Uarco's marketing VP.

Though terms of the settlement were not made public, Kreiner says no other IS employees have left the company.

Balow says Convergent is still negotiating funding and plans to start recruiting. "Our goal is to have 250 to 300 people by the end of 1999," he says.

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