Sued as Secondary Offering Hits Market

In an SEC filing the same day its offering is priced, the company discloses a suit filed by rival Digital River.
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Online software merchant (BYND) - Get Report, which priced a $140 million secondary offering of its stock Thursday evening, gave one little piece of bad news to investors in the Securities and Exchange Commission filing it made the same day: It's in court.

According to the amended S-1 filing, rival

Digital River

(DRIV) - Get Report

filed suit April 6 against in district court in Minnesota. Digital River is claiming that some of's officers "made allegedly false and defamatory statements regarding Digital River's business and interfered with Digital River's business." The complaint, according to's filing, seeks temporary and permanent injunctive relief and unspecified damages.

In a day that was mixed for Internet stocks, was trading Friday afternoon at 33 11/16, down 1 13/16. The 4 million shares the company was offering had been priced at $35 a share. Digital River was up 3 5/8 to 47. says in its filing that the two companies are now engaged in discovery and that a hearing on the case is scheduled for April 21. More specific information on the case wasn't immediately available.

Digital River, which helps software companies deliver their products to buyers over the Internet, declined to comment on's filing. executives didn't return a phone call seeking comment. Late last month completed a $123 million acquisition of

, a software retailer that, like Digital River, has expertise in delivering software over the Internet.

It's unclear what the impact of the lawsuit might be on In its filing, the company asserts that it is not currently subject to any material legal proceedings. But it does note in its disclosure of the lawsuit "there can be no assurance that an injunction or damages will not be granted against us, which could adversely affect our business, results of operations or the price of our stock."

It's also unclear whether acted improperly by not disclosing the news earlier; the SEC says the company filed at 5:09 EDT Thursday evening. "If there's material news, either positive or negative, concerning the company, management of the company has an obligation to disclose such information to the public at the earliest time possible," says Ron Geffner, a partner at law firm

Sadis & Goldberg

. "It's a factual question whether this information is material, and whether the information in their possession was accurate and complete."