VeriFone Systems, a point-of-sale terminal maker, and its subsidiary VeriFone Media were sued Monday by Creative Mobile Technologies for more than $250 million. Creative Mobile, which sells in-taxi media, advertising and payment technology, claims VeriFone breached an agreement over placing ads on in-taxi screens in New York.
The New York-based company's suit charges the defendants with "wrongful, malicious, tortious and contractual breaches" of Creative Mobile's agreement with its "exclusive in-taxi advertising partner," according to a press release issued Monday.
Creative Mobile, which was founded in 2005, serves more than 20,000 taxicabs in 30 states. In March 2006, Creative Mobile said it entered into an exclusive sales agreement with Clear Channel Taxi Media (CCTM), which included the company agreeing "to run the advertising program on [Creative Mobile's] in-taxi screens as the exclusive seller in New York City taxis," according to a release.
VeriFone, which is based in San Jose, Calif., purchased CCTM in 2009.
Creative Mobile claimed VeriFone Media violated the agreement by failing to pay the company and withholding financial information, among other things required by the contract.
From the release issued by CMT:
"The lawsuit alleges that VeriFone, including its Chief Executive Officer Douglas Bergeron, knew of the existence of the exclusive agreement between CMT and CCTM when VeriFone purchased CCTM in 2009 and that VeriFone specifically acknowledged its subsidiary's obligations under the agreement and said that those obligations would be honored."
VeriFone didn't respond to requests for a statement.