Friday, December 11, 2009

Updates re: News America Marketing and Floorgraphics, Insignia, and Valassis

A few updates regarding the litigation involving News America Marketing:

Floorgraphics: As reported by BNET news, News America Marketing filed suit against Floorgraphics and its four principal corporate officers on December 1, 2009. As readers may recall, Floorgraphics settled its federal lawsuit against News America in the middle of trial for an undisclosed sum, which included the sale of Floorgraphics' remaining contracts with retailers to News America. In its complaint, News America disclosed that the amount that News America paid to Floorgraphics "in connection with its acquisition of the Floorgraphics business" was $29.5 million. It's unclear whether that amount includes attorneys' fees and any other amount related to the settlement of the lawsuit. News America claims in its new lawsuit that Floorgraphics fraudulently misrepresented the value of its retailer contracts. While $1.75 million was set aside in an escrow to address such issues, News America has alleged that the value of Floorgraphics' contracts and goodwill was overvalued by close to $12 million, in part because some of the contracts did not exist or could not be assigned to News America. While Floorgraphics could lose the $1.75 million that has been placed in escrow, it seems unlikely that Floorgraphics will be forced to pay any additional amount, as the agreement provides that News America can recover more than that amount only in the event of fraud or intentional breach.

Insignia: Insignia filed a motion to compel News America to produce additional discovery to be used at trial. That motion is set to be heard January 22, 2010. A settlement conference has been ordered by the Court to take place on April 12, 2010. The order requires the parties and trial attorneys to attend the settlement conference with full settlement authority, suggesting that the Court is strongly encouraging the parties to settle.

Valassis: The Court overseeing the federal Valassis v. News America case issued a pre-trial order today setting deadlines for certain procedural events prior to the February 2, 2010 trial date, such as the exchange of exhibit and witness lists, and the exchange of deposition designations. The order stated that trial is expected to last approximately two months.

Earlier this month, it was reported that News America lost a motion for a new trial in the state court case in which Valassis was awarded $300 million in damages.

Valassis also has an action pending against News America in California. According to one source, the court is not expected to set a trial date until after the federal trial is resolved.

As always, tips and insights from readers are appreciated, including those who may have been affected by News America's alleged acts.


The Law Firm of Kotchen & Low LLP - Civil Litigation, Counseling, and Representation Before Government Agencies

This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License.