Struggling online payments firm earthport is to pursue a claim against UK Internet bank Egg for alleged breach of contract.
News of the claim against Egg, a former customer of earthport's online wallet, comes as the AIM-listed enterprise reports a grim set of yearly results marked by a £12 million loss and an £8.2 million negative asset balance sheet. The firm says it is looking for additional financing but warns that it may have to file for voluntary liquidation if insufficient funds are raised.
Looking ahead, earthport holds out the prospect of a write-back of £1.2 million in liabilities following the expected liquidation of its 101010 Limited subsidiary and £0.5m in exceptional gains, of which £0.4m is attributable to a contract with Egg Banking.
"In addition," says the firm in a statement to the Stock Exchange "the company has prepared a claim against Egg for a substantial sum under the November 2001 contract and for related work and intends to pursue this vigorously in the first quarter of 2004".
A spokesperson from Egg confirms the bank has been advised of a potential claim. "Egg treats all matters of this nature seriously and strongly refutes these allegations," says the spokesperson. "Following internal investigations, Egg has formally rejected these claims through its legal advisers."