According to the attorney for the plaintiffs, Jim Day of Bush Strout and Kornfeld, three former employees of Websuite.com, Inc., commenced an involuntary Chapter 7 bankruptcy case against the company in the United States Bankruptcy Court for the Western District of Washington in Seattle. The petitioning creditors are among at least twenty-five former employees of Websuite who are owed in excess of $100,000 in wages and expense reimbursement, statutory damages and other amounts following their receipt last month of worthless payroll checks that bounced.

Efforts by the petitioning employees to collect from the company failed, and they may have lost valuable time while negotiations were going on, because the company could well have used the time to transfer assets so that the employees and other creditors will have much more difficulty collecting, if they can at all.

While the employees were trying to get their money and insurance benefits, Summit Healthcare meanwhile bought a majority interest in Websuite.com, and presumably provided to pay Websuite's debts in the acquisition, but so far has failed to do so, as the former employees have not been paid, says Day. Websuite officials told Realty Times and Day that the problem was a payroll company which removed funds from the wrong account, but that explanation doesn't cover why the employees and other creditors have not been paid more than a month later. Now a third party is emerging which is helping Websuite, but still no money is forthcoming.

Under the circumstances, Day is stunned that Websuite is continuing to pursue evasive tactics.

"I am surprised that they didn't come back and say, "What can we do to get this to go away?"" says Day. "We were concerned that the N.A.R. contract was going to be spun off to another company and we wanted to stop any other asset transfers from Websuite. They have just spent quite a bit of money on their trade show participation at the N.A.R. convention, for example, and before any other value in the company left, we wanted to pursue this. We are aware that Summit Healthcare purchased the majority interest in the company not too long ago, and it should be obligated to fund the operating expenses of the company, but that didn't happen. I did just receive a call from another creditor who is starting an action against Websuite. We wanted to get the bankruptcy commenced to stop the transfer of assets that would contribute to getting these employees paid."

The reason this story should be of interest to Realtors is that Websuite is the technology provider hired by the National Association of REALTORSâ to create the training platform for the e-PRO certification, and the N.A.R.'s association with the company is risky at best. If Websuite doesn't pay its debts, including those to the N.A.R., the trade organization can stand to lose a lot of money, plus suffer embarrassment at a second technological failure. But something is beginning to smell rotten anyway, as the N.A.R. seems to be playing a role in helping Websuite hide from its creditors.

Where is the N.A.R.'s conscience?

Why would the N.A.R. want to have anything further to do with Websuite? Why doesn't the N.A.R. insist that the company and its new owners, whoever they are, clean up these unsavory messes immediately before moving forward with the contract? Instead the N.A.R. appears to be the one determined to move forward, regardless of the taint.

The answers could lie in two things - future sales, and the ability to collect the past debt. The e-PRO certification has sold over 4,376 registrations as of October 2000, making it the most successful registration of any class in the N.A.R. University by many times over. Although the N.A.R. has not been paid by Websuite, according to Realty Times last report, the trade organization has a substantial "royalty" coming from the more than $1.3 million earned so far by the certification. And that may be why the N.A.R. is shaking hands with a mysterious new third party who has been brought in to fix Websuite's problems. Will the mystery guest please sign in?

Summit Healthcare's role is no longer clear, and eSphere Communications, has suddenly emerged as the new contract fulfiller of the e-PRO certification. According to founder and president Dennis Calverts, and apparently the company's sole employee, eSphere's job is to insure that Websuite will be able to fulfill its obligations to the N.A.R. Mr. Calverts would not disclose eSphere's role in Websuite's finances, or whether eSphere is an equity investor in Websuite. He explained that his company helps "dotcoms with core assets" who find themselves in Websuite's predicament - with lucrative contracts and unable to fulfill them. How these dotcoms find him is a mystery, unless they are lucky enough to have Mr. Calvert's pager number.

A visit to the eSphere's Web page produces no information about the company. What is not clear is who eSphere really is or whether any associates of Websuite, Summit Healthcare or the N.A.R. are also principals of the company. "There are a number of business relationships that we aren't going to comment upon," says Calverts. eSphere is a new company that acquires dotcoms in difficulty, he explains, and he is the principal shareholder.

"eSphere Communications is working with Websuite to make sure it can continue to service the e-PRO products and work with the N.A.R. I was bought in to recapitalize a business plan and to make sure that the relationship with N.A.R. remains alive," explains Calverts. "We have some business arrangements to work with Websuite to maintain stability and serve the N.A.R. The issues that are hitting Websuite are hitting most of the dotcoms and this is a typical situation where a company has a great product, but investors aren't willing to invest. They are faced with the same issues of how to retrench and move forward."

Apparently like Summit Healthcare, eSphere doesn't want to sign on for Websuite's bills. "I don't know all the facts, but it is not eSphere's obligation to deal with," says Calverts. "Websuite does have obligations and will need to deal with those."

The e-PRO show will go on

Mary Stark Hood, vice president of member benefits and strategic alliances of the N.A.R. says the N.A.R. is committed to moving forward with e-PRO. "The e-PRO certification is owned by N.A.R.," emphasizes Hood. "Websuite is going through some internal corporate changes, and any questions need to be directed to the principals of eSphere Communications. They have new investors and that group will continue to support and develop e-PRO."

Any concerns that their partner isn't paying its employees? "The N.A.R. does not comment on the internal problems of other companies," states Hood. "We are seeing some road bumps that many dotcoms are going through and we expect to move forward in a positive way with the individuals who are involved. The name of the company and principals are different, but the N.A.R. will retain all rights to e-PRO."

Websuite has until December 5 to answer the involuntary petition or face the immediate appointment of a trustee, who would take over control of the company and its operations. Explains Day, "They have three choices - they can contest it and claim they are paying their bills, two, consent to bankruptcy going forward as a Chapter 11 so they can remain in control, and third they can do nothing, and we go in with an order of default and a trustee would be appointed to take over company's assets"

If there are any assets left.

Published: November 22, 2000

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.