Webvan: Gone but not forgotten by angry shareholders

Just when you think things can't get any worse...

Defunct online grocer Webvan has been hit by a second lawsuit since filing for bankruptcy protection, as another one of its shareholders has raised a complaint about underhand dealing around the time of its flotation in 1999. Schiffrin & Barroway, a Pennsylvania-based law firm, claims the IPO underwriters were paid commission by undisclosed investors. The commission payments were not reported in the IPO prospectus and may have led some investors to buy shares under false pretences, Schiffrin & Barroway claim. The IPO underwriters included Goldman Sachs, Merrill Lynch, Robertson Stephens, Bear Stearns and Smith Barney. The underwriters are also alleged to have entered into agreements with investors to buy additional shares at predetermined prices after the IPO. A similar lawsuit was filed against the bankrupt company last week. Webvan filed for Chapter 11 bankruptcy earlier this month.