Today’s Boston Herald ran a story regarding a lawsuit filed at Suffolk Superior Court. Kevin Ahearn, president of Otis & Ahearn filed a lawsuit against CondoDomain.com and the founder of the company Anthony Longo, stating it violated an agreement to maintain a web site (business) as an online advertising magazine for real estate.
According to the Boston Herald:
Ahearn – whose firm had sales in excess of $300 million last year, according to the MLS Property Information Network – invested over $100,000 in CondoDomain.com. In court documents, Ahearn said he became a minority owner in Longos firm based on an implied promise not to compete with Ahearns real-estate firm.
The complaint says Longo later changed the business model to a discount brokerage. At no time was it represented that CondoDomain would engage in real estate brokerage, the complaint said.
Longo agrees that the site was launched as a way to lure potential condo buyers. But he said the advertising Web site failed, and he had to switch gears to survive.
My thoughts: First of all, I hope these two brokers can settle this out of court. I personally, don’t know Kevin Ahearn or Anthony Longo so I have no bias in either direction.
I agree with Anthony Longo that a web based advertising web site is a tough business model to make money on. I’m trying it myself with this blog, with very little success. However, if Kevin Ahearn invested money in CondoDomain.com based on the fact it was an advertising web site, shouldn’t Anthony follow through on his promise, if it fails, so be it.
Anthony has every right to own and operate a real estate discount agency, but not on Kevin Ahearn’s dime. I think the fair thing for Anthony to do is buy Kevin Ahearn out or dissolve the company (CondoDomain.com). Anthony, can then start a new company under a new name with the same business model. I don’t think Kevin Ahearn is trying to stop discount real estate companies from existing, I just think, he doesn’t want to be affiliated with them because it hurts his companies branding. Do you really think Kevin Ahearn would invest $100,000 on a company that charges $3,000 – $5,000 per real estate transaction? I don’t think so.
What are your thoughts?