Local Web Start-Up Bought From Bankrupt Ceo

Backers of a Spokane company trying to become an online used-car trading post have agreed to buy the company from its bankrupt founder.

The agreement between Tom Greenfield and the three main investors in his idea, Dealerswap.com, evolved after a shareholder meeting last week.

Investors Phil Thorn, Daniel McKinney and Jeffrey Marshall agreed to pay $75,000 on debts Greenfield amassed since starting the company late last year.

In return, the three investors will own the e-commerce software - the only remaining company assets.

The three originally invested about $600,000 in Dealerswap.com in exchange for a 26 percent stake.

Greenfield, Dealerswap’s CEO, owned 64 percent. Eight secondary investors owned the other 10 percent.

Greenfield, 29, a used-car salesman, claimed the online service could generate millions in profits by matching used vehicles with registered traders across the continent.

In his plan, dealers from different cities would swap vehicles they could find by browsing the Dealerswap Web site. Traders would pay a fee to Dealerswap for serving as broker.

Though Greenfield opened a Spokane office and hired staff, the Web site never was launched. The office closed this summer.

Both parties sued each other earlier this year. The investors claimed Greenfield had raised money fraudulently and was trying to sell the company to a Seattle competitor.

Greenfield countersued, saying investors interfered with his CEO role.

Last week, Greenfield agreed to sell his shares if the investors paid off the $75,000 in debt.

Greenfield’s attorney, Doug Siddoway, said outstanding debt exceeds that amount, but he’s unsure of the total.

“The investors have the choice of paying more than $75,000. That’s something they can work out with creditors,” Siddoway said, adding the agreement settles all pending suits. After the debt payoff, the investors plan to dissolve the company, he said.

Thorn has said he and his partners plan to use Dealerswap’s software to revive the concept under a new corporate structure.

Siddoway said Greenfield’s misfortune was launching a new company just as dot-com firms sank like stones on Wall Street.

“I hope the investors can bring the right people into the company. The only thing lacking from the start was adequate capital,” Siddoway said.

Greenfield said he has no other immediate plans. “I wish them well. I hope they can make something happen for themselves.”