Friday, February 20, 2009

Valassis’ Quarterly Earnings Update

Valassis reported its quarterly earnings on February 17, stating that it spent $2.5 million in the Fourth Quarter of 2008 on legal fees in its lawsuit against News America.

During its earnings call, Valassis stated:

News America has been trying to delay these trials as long as they can and push them off as long as they can.

So my understanding is there's a motion being heard by the judge right now where they are trying to delay the . . . March trial date [sic] because they have got another trial that overlaps with Floor Graphics, who has a case against them."

The court subsequently issued an order canceling the March 3 final pre-trial conference pending the resolution of the parties' motions for summary judgment. Depending on how long it takes for the court to resolve the summary judgment motions, it's likely that trial will be pushed back from April until at least May, if not longer.

The summary judgment motions were filed under seal, as were most documents in the case, as observed in this article today on BNET. Such secrecy is typical in this type of litigation, which involves competitively sensitive business information.

Valassis' reported a loss of $222 million for the quarter, which includes a non-cash write-down of assets of $245.7 million. Excluding the write-down, earnings would have been $1.4 million, or 3 cents per share.

UPDATE 2/24/09: UponNews America Marketing's request, Judge Cox recused himself from hearing the case, and the case was randomly assigned to Judge Arthur Tarnow. A reassignment this late in the case is unusual, and is likely to cause a delay while the newly-assigned judge gets up to speed on the issues. Judge Cox's order does not specify the grounds for his recusal.

Related posts: Update on News America Litigation; Valassis and News America File Summary Judgment Motions; Valassis' $1.5 billion Lawsuit Over FSIs.


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