infoGROUP, INC.

infoGROUP, INC.

infoGROUP, INC. Securities Settlement

The lawsuit was settled for $13 million in cash. The following is a summary of the proceedings in the lawsuit: ‘On March 8, 2010, infoGROUP publicly announced that it had entered into a definitive merger agreement with CCMP Capital Advisors, LLC (CCMP) for $8.00 per share (the Merger). On March 11, 2010, the Fund, by its counsel and on behalf of all other similarly situated public shareholders of infoGROUP, filed an initial class action complaint in this Court for breaches of fiduciary duty against the Director Defendants and the Company arising from alleged breaches of duty to the Company public shareholders in connection with the decision to cause the Company to enter into the merger agreement with CCMP. The Fund March 11, 2010 complaint also brought aiding and abetting claims against CCMP, Omaha Holdco Inc., and Omaha Acquisition Inc. (collectively, the CCMP Defendants). On March 17, 2010, Plaintiff Kistner filed a putative class action Complaint Based on Self-Dealing and Breach of Fiduciary Duty in the District Court of Douglas County, Nebraska, Case Doc. 1106 No. 189, against Defendants and the CCMP Defendants for breach of fiduciary duty and aiding and abetting the same in connection with the Merger. Two additional related actions were filed in the District Court of Douglas County, Nebraska and were captioned The Pennsylvania Avenue Funds v. infoGROUP, Inc., et al., Docket 1104, No. 822 (March 9, 2010) and Sappenfield v. infoGROUP, Inc., et al., Docket 1105, No. 146 (March 16, 2010) (collectively the Nebraska Actions). Plaintiff Kistner counsel then appeared by invitation in this Delaware Action, filed pro hac vice applications with the Court on June 4 and June 11, 2010, and have been actively involved in this Delaware Action, essentially assuming the role as Co-Lead Counsel for the duration of the litigation. The Nebraska Actions thereafter remained inactive and were voluntarily dismissed in late March and early April 2013. On or about March 23, 2010, the Fund served its First Request for the Production of Documents directed to all of the Defendants. The Defendants served responses and objections to those requests on or about April 13, 2010 (the infoGROUP Defendants), April 29, 2010 (the CCMP Defendants), and May 3, 2010 (Defendant Gupta). On March 30, 2010, infoGROUP filed a Schedule 14A Preliminary Proxy Statement (the Preliminary Proxy) regarding the Merger with the United States Securities and Exchange Commission (the SEC). The March 30, 2010 Preliminary Proxy stated that the infoGROUP Defendants anticipated completion of the Merger in June of 2010. infoGROUP issued subsequent amended preliminary proxies on May 3, 2010, May 18, 2010, and May 27, 2010. On April 8, 2010, the Fund filed its First Amended Class Action Complaint, bringing additional claims for breach of fiduciary duty against the Director Defendants in connection with a number of alleged material misstatements and omissions (the Disclosure Claims) in the March 30, 2010 Preliminary Proxy. On April 15, 2010, the Fund filed a Motion for Expedited Proceedings, which Defendants opposed. Also on April 15, 2010, the Fund filed a Motion for Preliminary Injunction. On April 22, 2010, the Court held an office conference concerning the Fund Motion for Expedited Proceedings, during which then Vice-Chancellor Strine directed the parties to agree upon and submit a schedule providing for appropriate expedited discovery. On April 27, 2010, the Court entered a proposed case schedule which had been submitted by the parties. Pursuant thereto, the parties and their counsel conducted substantial expedited discovery over the course of the next two months. Specifically, the parties conducted negotiations concerning the production of both paper and electronic documents from the various Defendants, and the source of those documents, including the identities of the custodians whose records would be searched and reviewed in connection with expedited discovery. The parties also negotiated search terms in connection with the discovery of electronic materials, and a protocol for the Defendants search and review of electronic materials. The parties negotiated an expedited deposition schedule in connection with the preliminary injunction motion, including, inter alia, the scheduling of Defendant Gupta deposition, which ultimately required Court resolution. The Fund issued subpoenas to and obtained documents from non-parties, including: Evercore; the Blackstone Group (Blackstone, Defendant Gupta financial advisor); Bank of America (which provided financing in connection with the deal); and Vector Capital. Ultimately, Plaintiffs received and reviewed over 33,000 pages of documents in connection with expedited discovery, approximately 25,000 pages of which were produced by Defendants and approximately 8,000 pages of which were produced by non-parties. On June 2, 2010, the Fund served responses and objections to infoGROUP May 13, 2010 First Request for the Production of Documents directed to the Fund, and produced documents in response to those requests prior to the hearing on the Motion for Preliminary Injunction. Plaintiffs counsel retained the services of and consulted with expert financial consultant Travis R. Keath of Value, Inc. to issue an expert report concerning valuation and related issues, and concerning the reliability of Evercore fairness opinion and underlying analysis. Mr. Keath submitted an Affidavit In Support of the Fund Motion For Preliminary Injunction on June 15, 2010. Plaintiffs counsel also took the depositions of the following eight witnesses in expedited discovery: Defendants Vinod Gupta, Bill Fairfield, Gary Morin, and Roger Siboni; Evercore Managing Director Jason Sobol; CCMP Managing Director Richard Zannino; Vector Capital Managing Director Alex Slusky; and Evercore Senior Managing Director Saul Goodman. In addition, Defendants counsel took the deposition of Plaintiffs financial consultant, Mr. Keath. On May 28, 2010, the Company issued its Definitive Proxy Statement on Schedule 14A (the May 28, 2010 Definitive Proxy Statement) regarding the Merger, announcing that a shareholder vote would be held on June 29, 2010. On June 16, 2010, the Fund filed its opening brief in support of its Motion For Preliminary Injunction. Defendants filed their papers opposing the Fund Motion for Preliminary Injunction on June 20, 2010. The Fund then filed its reply papers in further support of the Motion for Preliminary Injunction on June 22, 2010. On June 22, 2010, the Fund and its counsel filed a Motion to Strike Certain Affidavits which had been submitted by Defendants in connection with their opposition to the Motion for Preliminary Injunction. Defendants opposed this Motion to Strike, and the Motion to Strike was fully briefed as of the hearing date on June 24, 2010. On June 24, 2010, Chancellor Chandler heard oral argument on Plaintiffs Motion for Preliminary Injunction. At the hearing, Chancellor Chandler denied the Motion for Preliminary Injunction. Chancellor Chandler also dismissed the aiding and abetting claims against the CCMP Defendants. infoGROUP stockholders approved the Merger Agreement at a special meeting on June 29, 2010. The Merger was then consummated on July 1, 2010. On October 18, 2010, the Fund filed an Unopposed Motion for Leave to File Its Second Amended Consolidated Class Action Complaint (SAC), which was granted by the Court on October 20, 2010. The Fund filed the SAC under seal on October 20, 2010. On or about November 9, 2010, the Fund and counsel served separate second sets of document requests on the infoGROUP Defendants and on Defendant Gupta. Defendants served responses and objections to these second sets of requests on December 13, 2010 (the infoGROUP Defendants) and December 17, 2010 (Defendant Gupta). On January 14, 2011, the infoGROUP Defendants and Defendant Gupta moved separately to dismiss the SAC. After briefing was completed, the Court heard oral argument on the motions to dismiss on June 21, 2011. On September 30, 2011, as amended October 6, 2011, the Court issued a Memorandum Opinion, which granted in part and denied in part Defendants motions to dismiss. On November 18, 2011, the Fund separately issued Third Requests for the Production of Documents to the infoGROUP Defendants and to Defendant Gupta. On or about January 10, 2012, the infoGROUP Defendants and Defendant Gupta submitted separate sets of responses and objections to these Third Requests. On November 18, 2011, the infoGROUP Defendants served their Second Requests for the Production of Documents upon Plaintiff, and Defendant Gupta separately served his First and his Second Requests for the Production of Documents upon Plaintiff. Defendant Gupta also served his First and his Second Requests for the Production of Documents upon the infoGROUP Defendants. On or about January 13, 2012, the Fund served responses and objections to these respective sets of requests directed toward it, and the infoGROUP Defendants served responses and objections to Defendant Gupta document requests directed toward them. On November 22, 2011, the Court entered a Stipulation and Scheduling Order. On December 15, 2011, the infoGROUP Defendants and Defendant Gupta filed and served separate Answers to the SAC. In late January 2012, Defendants began producing additional documents, beyond those they had already produced during expedited discovery. The Fund similarly began producing additional documents in mid-February 2012. Plaintiff Kistner began producing documents in July 2012. Both the Fund and Kistner also prepared and produced privilege logs. The parties also engaged in written discovery in 2012, including requests for admission and interrogatories. During the spring and early summer of 2012, as document discovery proceeded, numerous material disputes arose between the parties, including, inter alia, disputes with respect to the scope of the various Defendants document productions. The Fund and its counsel filed motions to compel the production of additional documents by Defendant Gupta (filed April 5, 2012) and the infoGROUP Defendants (filed May 4, 2012). On May 8, 2012, Defendant Gupta filed a Motion to Compel the Fund to supplement its responses to certain of his interrogatories. On May 17, 2012, the infoGROUP Defendants filed a Motion to Compel the Fund to supplement its answers to their February 29, 2012 Second Set of Interrogatories. On June 7, 2012, the parties participated in a one-day mediation session before JAMS mediator David Geronimus, Esq., in New York, New York. This mediation was unsuccessful. On July 17, 2012, the Court heard oral argument on the parties respective motions to compel. On August 16, 2012, the Court issued a Letter Ruling on the four Motions to Compel. The Court granted in part and denied in part Plaintiff Motions to Compel directed at Gupta and the infoGROUP Defendants, granted the infoGROUP Defendants Motion to Compel Directed to Plaintiff, and denied Defendant Gupta Motion to Compel. Thereafter, Defendants produced thousands of documents on a rolling basis beginning in August 2012 (for Defendant Gupta) and on October 19, 2012 (for the infoGROUP Defendants). The infoGROUP Defendants also produced privilege logs. In an effort to address what Plaintiffs characterized as spoliation issues of Defendant Gupta, on September 7, 2012, Plaintiffs deposed four individuals: Ron Bliss, a Network Engineer for Computer Solutions, Inc., an outside vendor retained by Everest Group, LLC, an entity affiliated with Defendant Gupta; Paul Nietzel, Operations Manager for Everest Group, LLC; Curt Van Hill, Investment Manager for Everest Group, LLC; and Gregg Maynard, Consultant at FTDiscovery, a computer forensics and electronic discovery firm retained by Defendant Gupta. On September 24, 2012, Plaintiffs filed a Motion for Class Certification and opening papers in support thereof. In October 2012, Defendants deposed the Fund Administrator George R. Laufenberg and Plaintiff Kistner in connection with Plaintiffs Motion for Class Certification. On or about November 16, 2012, Defendants filed papers in opposition to Plaintiffs Motion for Class Certification. Plaintiffs filed their reply brief in further support of the Motion for Class Certification, and supporting papers, on December 7, 2012. On January 17, 2013, the Court heard oral argument on Plaintiffs Motion for Class Certification. On February 13, 2013, the Court granted Plaintiffs Motion for Class Certification and certified a class of all holders of infoGROUP common stock at any time from March 8, 2010 through and including July 1, 2010, whether beneficial or of record, including their legal representatives, heirs, successors in interest, transferees and assignees of all such foregoing holders, excluding the Defendants and their associates, affiliates, legal representatives, heirs, successors in interest, transferees and assignees. The Court also appointed Plaintiffs as Class Representatives and Milberg LLP and Robbins Geller Rudman & Dowd LLP as Class Counsel. In post-close discovery, Plaintiffs obtained and reviewed over 157,000 pages of documents from Defendants. In addition to pursuing discovery from Defendants and their related entitles, Plaintiffs obtained and reviewed nearly 275,000 pages of documents from twelve third parties throughout the litigation, including Evercore Group L.L.C.; Vector Capital, L.P.; Blackstone; CCMP; Silver Lake Management, L.L.C.; Bank of America; Dun & Bradstreet Corporation; First National Bank of Nebraska; Northern Trust Corporation; Kohlberg Kravis Roberts & Co. L.P.; Gregg Maynard; and Apax Partners L.P. These totals do not include the 33,000 documents produced and reviewed in 2010 during expedited discovery. Additional fact depositions began in April 2013. Plaintiffs counsel deposed eleven (11) additional fact witnesses, consisting of: Defendants Clifton Weatherford, John Staples, III, Lee Roberts, Bernard Reznicek, Gary Morin, George Krauss, and William Fairfield; Former Company General Counsel and Executive Vice President of Business Conduct Thomas McCusker; Former Company Senior Vice President of Corporate Relations Lisa Olson; Former Company CFO Thomas Oberdorf; and Blackstone Managing Director Anuj Agarwal. Additional depositions of Defendants Vinod Gupta, Roger Siboni and Tom Thomas, as well as representatives of Evercore and Vector, were set to take place in June and July 2013. In July and August 2013, Plaintiffs and Defendants engaged in arm-length negotiations, including participation in mediation, in an attempt to resolve the Action. Specifically, in late June 2013 the parties agreed to mediation before former United States District Court Judge Layn Phillips, and the mediation was scheduled for July 25, 2013. Counsel for the parties participated in a one-day mediation session on that date before Judge Phillips at the offices of Irell & Manella LLP in Newport Beach, California. After the July 25, 2013 mediation, extensive settlement talks continued between the parties, culminating in a Mediator Recommendation on August 21, 2013. This Recommendation was accepted by all parties on or before August 27, 2013. On August 28, 2013, counsel for the parties notified the Court by telephone that an agreement-in-principle had been reached to settle the matter, and that the parties would be submitting settlement papers in connection therewith.’

 

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