Sep 20, 2007 2:00 PM PDT    Text size: 

Mana, which operates IWantU.com, filed suit last year in U.S. District Court in Miami claiming that it is owed $83,000 plus attorneys fees and interest, which so far has bumped up its total to $103,000.

Attorney David Steiner, who represents Mana in the accounting-claim case, was not available for comment at post time.

But XBIZ has learned that attorneys for iBill parent Interactive Brand Development (IBD) withdrew their defense against Mana last month, citing “irreconcilable differences” with IBD.

IBD’s former law firm, Arnstein & Lehr, did not respond for comment, nor did company officials.

Last month, the federal judge involved in the case entered a default judgment against IBD as a result of their failure to retain attorneys in the case.

Mana and an unknown number of adult webmasters have pursued litigation against IBD for nonpayment of an untold number of processing reserves.

Troubles in recent months have mounted incrementally for iBill’s parent company. Broke and unable to satisfy the judgments, the company has ceased operations.

IBD last month wrote in a recent Securities and Exchange Commission filing that it has 116 lawsuits pending against the company in an aggregate amount of approximately $52 million. As of June, the company has incurred judgments worth $9 million.

In August, the company was forced to liquidate at auction its collection of cel art valued at $6.5 million. And two days after the auction, the company received notice that an affiliate of Castlerigg Master Investments Ltd. had been granted a judgment of $7 million against the company.

iBill’s tangled mess can be pinpointed at its corporate acquisition and woes it incurred with a partnering credit card company.

iBill’s troubles date back to its notification by First Data Merchant Services that it was dropping iBill from its merchant account. iBill tried to secure another merchant account holder and, according to some, failed to tell its clients.

Webmasters were frustrated in their attempts to contact the processor, which until two years ago, was one of the top third-party processors along with CCBill and Paycom.

IBD, formerly known as Care Concepts, purchased iBill and Media Billing LLC from a consortium of companies, including Penthouse, in 2004 for $55 million in an all-stock deal.

Nearly a year earlier, Norcross, Ga.-based InterCept Inc. through its Media Billing LLC division sold iBill to Penthouse for $700,000 in cash, $800,000 in a short-term loan and the assumption of $22 million in debt.

At one point IBD housed nearly 200 employees in a 50,000-square-foot headquarters and data center in Deerfield Beach, Fla.