PHOENIX, Ariz. (HedgeWorld.com)–Quepasa.com Inc. announced a lawsuit against hedge fund manager Robert E. Dixon and various entities under his control, at the same time that it rejected Mr. Dixon’s unsolicited buy-out offer.

Quepasa is a Nevada-chartered company that operates a Spanish/English web portal, marketing especially to the Hispanic population of the United States.

Quepasa’s president, Jeffrey Peterson, said in a statement that he believes Mr. Dixon’s tender offer is not a good faith effort at acquisition but a case of greenmail.

“For months, they have been aggressively trying to sell those shares back to Quepasa at a profit, in as short a period of time as possible–to address what would appear to be their own internal liquidity problems,” said Mr. Peterson, who added that his company will not “entertain any proposal that works to the advantage of any group in connection with such underhanded agenda as greenmailing.”

A Troubled Dot-Com

Quepasa had its initial public offering in 1999 and, in the process, raised net proceeds of US$55 million.

The bursting of the dot-com bubble the following year hit Quepasa very hard, and by December 2000, management announced that it was considering the liquidation of its assets if it could not find a buyer.

In April 2001, though, Quepasa seemed to have found a white knight, entering into a merger agreement with Great Western Land and Recreation Inc. The original plan was to close by yearend, but difficulties arose in execution and in October the parties reached an amended agreement putting off closure until March 2002. Also in October, investor groups discontented with the prospective merger initiated both a proxy fight and litigation. The dissidents, who included Mr. Peterson, won. They took control of the company in February 2002 and terminated its agreement with Great Western.

At the time of their victory, the stock price of Quepasa was roughly US$0.13 (OTC). It rose to US$0.18 by late March and has fallen since, now hovering around US$0.05.

More on the Sutters

According to documents filed with the Securities and Exchange Commission, Mr. Dixon and the Sutter family of entities own more than 12% of the stock of Quepasa. They have a history of speculative offers.

Mr. Dixon did not answer a call requesting comment on the Quepasa matter. In statements, Sutter Holding has described itself as a diversified holding company that intends to acquire profitable operating businesses, as well as minority interests in promising private or public companies in the fields of real estate, precious metals, oil and gas, and venture capital.

In July, within days of WorldCom, Inc.’s bankruptcy filing, Sutter Opportunity offered to acquire shares of several trusts holding its securities.