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Digital Courier files suit against shareholder group

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Salt Lake-based Internet payment technology company Digital Courier Technologies Inc. said Friday it has filed a lawsuit in U.S. District Court for the Northern District of California in response to a "consent statement" filed in December by a group of shareholders.

The shareholder group is led by James Egide, the company's onetime chairman and chief executive officer.

The complaint alleges the consent statement is false and misleading and violates the Securities Exchange Act of 1934 and Securities and Exchange Commission rules. It also charges that the statement omits material information about DCTI.

The group charges current management, which has served only a brief time, with responsibility for DCTI's cash flow and other financial problems that have resulted from the company's being required to write down the value of various acquisitions and incur charges for uncollectible charge-backs and credit card association fines.

The write-downs total more than $188 million, and the company has incurred more than $7 million in uncollectible charge-backs and fines.

The company said management believes these problems are the result of actions taken by Egide and other members of the group who were formerly responsible for managing DCTI.

The company seeks damages and an injunction prohibiting the group from soliciting shareholder consents and prohibiting the voting of any shares pursuant to the consent statement "until the Egide Group files a truthful and non-misleading consent statement."