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Shareholders of defunct broadband Internet company At Home Corp. have filed a long-anticipated securities fraud complaint against AT&T Corp., Kleiner Perkins Caufield & Byers and former CFO Mark McEachen, among others, claiming they did irreparable harm to the company. Under the complaint filed Tuesday, in the U.S. District Court for the Southern District of New York, shareholders are seeking damages and statutory compensation from all defendants and punitive damages in an amount to be determined at trial. They also are seeking attorney fees and any further relief the court finds proper. According to court documents, AT&T “secretly took and converted” At Home’s proprietary technology for its own use, rendering AT&T’s need for At Home “nil or superfluous.” The complaint says that senior At Home officers, including its former director of business and corporate development and chief technology officer, have stated that AT&T personnel were given “unique and unfettered access to At Home’s proprietary technology, intellectual property and know-how” in order to transform AT&T’s cable television wires into a high-speed Internet access business. AT&T owned 23 percent and maintained voting control of Redwood City, Calif.-based At Home when it filed for bankruptcy in September 2001. “We want to bring AT&T down for what it’s done,” said Suzy Witten, a member of the shareholder group. “It’s part of the massive corruption against the American shareholder.” A spokeswoman for New York-based AT&T said the company had just received a copy of the complaint so it would be premature to comment on it. Former CFO McEachen is accused of “hiding and refusing to recognize in accounts payable approximately $20 million worth of [At Home's] accounts payable bills” from computer, server and other vendors. He also is alleged to have inflated At Home’s revenues by approximately $80 million and then fired its auditors after the overstatement was discovered. McEachen could not be reached for comment. In addition, a number of company directors are accused of breaching their fiduciary duties by signing false filings made with the SEC. Among them: C. Michael Armstrong, chairman and CEO of AT&T and a former director of At Home; George Bell, former chairman and CEO of At Home; Thomas Jermoluk, another former chairman and CEO of At Home; William Randolph Hearst III, former vice chairman of At Home and a general partner with Kleiner Perkins; and John Doerr, another director at At Home from Kleiner Perkins. Menlo Park, Calif.-based Kleiner Perkins said it had no comment on the complaint. The shareholders also claim that Atlanta-based Cox Communications and Philadelphia-based Comcast Corp. (which is about to complete its acquisition of AT&T Broadband) took steps to change their relationships with At Home so they could also supply At Home’s services themselves. Comcast is accused of secretly building its own network to compete against At Home, representing a “drastic change” from the companies’ stated commitments to At Home. A spokesperson for Comcast said the company would not comment on the litigation. A representative for Cox could not be reached for comment. �Copyright 2002, The Deal, LLC. All rights reserved.

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