SAN DIEGO, March 15, 2010 (GLOBE NEWSWIRE) -- The Shareholders Foundation, Inc. announces that a lawsuit has been filed in Nebraska State Court on behalf of current investors in infoGROUP Inc. (Nasdaq:IUSA), who purchased their IUSA shares before March 08, 2010, over alleged breach of their fiduciary duties.
On March 08, 2010, infoGROUP Inc. announced that Private equity firm CCMP Capital agreed to acquire infoGROUP Inc.(Nasdaq:IUSA) for about $460 million. Under the terms of the offer, infoGROUP shareholders would receive $8.00 for each share of infoGROUP stock they own. infoGROUP, founded by Vinod Gupta in 1972, is a provider of sales leads, mailing lists, direct marketing, database marketing, e-mail marketing and market research solutions.
According to the complaint the plaintiff alleges that the proposed acquisition is unfair to shareholders because it represents no premium and rather a 2% discount from where the shares were most recently trading before the announcement. The plaintiff alleges that infoGROUP's share price does not reflect its true value due to, among other things, the fact that its founder Vinod Gupta destroyed enormous value for the company's shareholders by improperly spending millions of dollars of infoGROUP's money on extravagances such as jet travel, vacation homes, a yacht, country club memberships and a collection of luxury automobiles. Two shareholder suits were filed in 2006, a Securities and Exchange Commission ("SEC") investigation was initiated, and an internal investigation was conducted, which additionally cost infoGROUP millions in expenses. After the derivative lawsuits were settled, a tentative settlement with the SEC was reached, and Vinod Gupta was replaced as CEO, shares of infoGROUP have more than doubled over the past year.
The plaintiff accuses also that the unfair sales process was tailored to the specification of CCMP and the proposed acquisition is the product of an unfair sales process, designed not to maximize value for the company's shareholders, but to benefit company insiders such as Gupta.
Gupta was among the board members who unanimously approved the sale, but then resigned from the board later last week. Gupta holds nearly 15 million of infoGROUP's shares, which would be worth about $118 million under the agreement with CCMP.
Those who currently are investors in shares of infoGROUP Inc. (Nasdaq:IUSA) and purchased their shares before March 08, 2010, should contact the Shareholders Foundation, Inc. by e-mail at mail@shareholdersfoundation.com or call +1 (858) 779-1554.
The Shareholders Foundation, Inc. is an investor advocacy group which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. The group offers help, support, and assistance for every shareholder, and investors find answers to their questions and equitable solutions to their problems. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.
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