More Bad News For Overstock.com

More bad news for the sleazy corporate train wreck Overstock.com. The California Supreme Court threw out a motion to dismiss the company's junk lawsuit against Gradient Analytics and Rocker Partners.

This means that Overstock's wack-a-doo CEO Patrick Byrne will now be subjected to the hot light of civil discovery proceedings for the first time in his life. It means that Gradient and Rocker's legal team, headed by superlawyer David Boies, will now subject Overstock to subpoeanas for documents, and that Byrne & Co. will be grilled in lengthy, detailed, excruciating depositions.

If Byrne is aware of the Pandora's box he has opened, it would surprise me. The man is so deluded and detached from reality that I doubt that he has the wits to contemplate the consequences of anything he does.

Such as, for instance, being hacked to pieces by David Boies under penalty of perjury.

Such as beginning a process in which every single thing that Overstock.com, Patrick Byrne, and his minions have done will be exposed to public airing. The fruits of this inquisition will be available for everyone -- you, me, the media, regulators, the SEC, prosecutors -- to feast upon.

Lies and spin can only count against him, as will the company's long list of misdeeds -- ranging from questionable accounting to hiring a paid stalker named Judd Bagley. The latter took time out from dressing up as a woman to stalk Wikipedia editors, and crafted a creepy press release "celebrating" this awful news.

The last bad news Overstock "celebrated" was an SEC subpoena last year. That signaled the commencement of an SEC investigation that continues, while a parallel SEC investigation of Overstock's charges resulted in Gradient et al being cleared.

So it is fair to assume that this lawsuit is not going to go Overstock's way, and that this putrid company is about to undergo a welcome airing of its dirty laundry.

UPDATE: This post seemed to draw blood from Team Byrne, which posted an anti-Semitic slur against me on the sewer called the Investor Village message board -- always a sign that I've hit home. Byrne, who had previously never met an anti-Semitic supporter he didn't like, had to weigh in to calm things down.

Meanwhile, Tracy Coenen updates the Bagley-related bad news in a three-part series in her blog (here's part one). O-Smear, meanwhile, posts some examples of Bagley's best "strategic messaging" on behalf of his employer.

© 2007 Gary Weiss. All rights reserved.



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