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Internet Networking Group May Split in Two to Settle $1-Million Suit

Organizations: The biggest sticking point now is how long IPN's president should wait to start a new L.A. group.


The two factions in a legal battle for leadership of the Internet Professionals Network, one of the largest technology networking groups in Southern California, are negotiating to dissolve the organization into two separate organizations.

Under the tentative agreement, IPN President Don Baarns will continue to operate the 9-month-old group in Pasadena, Orange County, Westlake Village and San Diego under the new name Tier One Network, the parties said. Baarns will wait at least three months before launching a new group in L.A.

Meanwhile, IPN co-founders Mari Serrano, Andrew Michalik and Steven Shmerler will form a technology networking group of their own in Los Angeles, tentatively to be called WebProNetwork, which may launch by the end of the month.

IPN's 1,000 members will gain automatic membership to both Tier One Network and WebProNetwork.

The agreement, which is expected to be finalized in the next 10 days, ends a $1-million lawsuit against Baarns.

Serrano, Michalik and Shmerler accused Baarns of hijacking IPN and turning it into a for-profit corporation under his sole control instead of running it as a community-oriented nonprofit.

Their suit also alleged that Baarns mixed IPN proceeds with money from his Web consulting business in Sylmar.

Baarns admits he incorporated IPN as a for-profit venture and kept the shares to himself. He said he used funds from Baarns Consulting to keep IPN afloat and reimbursed himself appropriately.

Baarns also said he settled because a protracted court battle was not in the best interests of IPN's members.

"This is definitely best for the members," Serrano said of the settlement. "We can just get back to producing events and not spend our time in court."

The Internet Professionals Network hosted meetings several times a month featuring speakers such as Microsoft Chief Executive Steve Ballmer. Members also used the meetings as a forum for networking with colleagues in the Internet community.

The biggest remaining sticking point in the settlement talks is how long Baarns should wait before organizing a new group in Los Angeles. Baarns is willing to hold off until June 15. Serrano, Michalik and Shmerler want until July 31 to get WebProNetwork off the ground before having to compete against Tier One Network.

But Dan Schecter, the Latham & Watkins attorney in Los Angeles representing Baarns, doubts the two groups will compete head to head for members.

"This allows both sides to carry on their vision of how an organization like IPN should be managed," Schecter said.

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