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CompuServe past shareholders

The online service weathers its shareholders' meeting but has yet to steer clear of financial and legal trouble.

No tomatoes were thrown today when CompuServe (CSRV), which has been losing money, subscribers, and executives, faced shareholders today at its annual meeting.

"It was pretty noneventful," said Gail Whitcomb, a company spokeswoman.

Still, eyebrows were raised during a press conference after the meeting when Frank Salizzoni, CompuServe chairman and acting CEO, was asked if the company would sell should offers be thrown its way.

"If there is somebody out there that is interested, then obviously we have to consider strategic alternatives like that," Salizzoni told reporters, according to Reuters.

Whitcomb, however, told NEWS.COM that the company is "legally" required to consider any offer made, as part of the board's fiduciary responsibility to its shareholders.

There are no known offers on the table, nor is its majority shareholder, H&R Block, looking to retain its ownership and pressure CompuServe's board to sell the company, she said.

"Block is still looking to spin off its 80 percent stake to Block shareholders," Whitcomb said. She said that spinoff is pending more favorable conditions in the marketplace and a return to sustained profitability by CompuServe.

The online service, which is refocusing on corporate customers and stepping away from the fiercely competitive consumer market, has posted four consecutive quarterly losses while revenues have been flat to declining.

CompuServe's corporate services unit has performed well, but its consumer online service has struggled as a number of Internet service providers launched $19.95 unlimited monthly usage deals.

And more recently, the provider's CEO, Robert Massey, resigned amid the losses and restructuring efforts.

The president of CompuServe's international operations and its chief technical officer also departed in the past year, and its third-quarter report noted a decline in subscribers.

In addition, CompuServe is facing a lawsuit from Time magazine, which filed action this week to prevent the company from terminating its presence on the online service and force it to pay the remainder of funds owed for a two-year contract.

Time is seeking $3.5 million in payments for the current year and wants the court to prohibit CompuServe from canceling the contract. The magazine left America Online to join CompuServe almost exactly a year ago.

CompuServe has responded to the lawsuit, saying that Time's online content has not proved sufficient to justify its presence on the online service. The company said there was an exit option at the midway point of the contract.

Reuters contributed to this report.