InfoGroup Inc. agreed to pay $13 million to resolve investors’ claims that directors sold the database-marketing company on the cheap to bail out founder Vinod Gupta.
InfoGroup will hand over $13 million from insurance to settle the class-action lawsuit brought by the New Jersey Carpenters Pension Fund, according to a Delaware Chancery Court filing. Gupta browbeat InfoGroup’s board into selling the company to CCMP Capital Advisors LLC for $463 million, shortchanging investors, the fund alledged.
The fund alleged Gupta, forced to step down as InfoGroup’s top executive over his use of corporate monies for private purposes, engineered a quick sale to New York-based CCMP in 2010 to unload his shares and raise millions of dollars to wipe out debt.
The settlement brings to a close more than seven years of litigation revolving around Gupta’s management of InfoGroup, which changed its name from InfoUSA in 2008. Investors criticized directors for allowing Gupta to use millions in company funds to support his lavish lifestyle and back the Clintons’ political campaigns and charitable works.
Gupta and other board members acknowledged no wrongdoing under the settlement, their lawyers said in a Feb. 4 court filing. They agreed to the accord “solely to eliminate the uncertainties, burden and expense of further litigation,” according to the filing.
Source: Bloomberg.com/news
