BEIJING, November 7, 2011 /PRNewswire-Asia/ -- VisionChina Media Inc. ("VisionChina Media" or the "Company") (Nasdaq: VISN), one of China's largest out-of-home digital television advertising networks on mass transportation systems, today announced rulings by the Supreme Court of the State of New York, New York County, concerning pending motions in two previously-announced lawsuits relating to VisionChina Media's November 16, 2009 acquisition of Digital Media Group Company Limited ("Digital Media Group").
The first lawsuit was commenced by VisionChina Media and its wholly-owned subsidiary, Vision Best Limited ("Vision Best"), on December 27, 2010 against Shareholder Representative Services, LLC, Gobi Partners, Inc., Gobi Fund, Inc., Gobi Fund II, L.P., Oak Investment Partners XII, L.P., Sierra Ventures IX, L.P., NIFSMBC-V2006S1 Investment Limited Partnership, NIFSMBC-V2006S3 Investment Limited Partnership, Thomas Gai Tei Tsao and other as-yet unnamed defendants. The second lawsuit was commenced on February 25, 2011 by Shareholder Representative Services, LLC, Oak Investment Partners XII, Limited Partnership, Gobi Partners, Inc., Gobi Fund, Inc. and Gobi Fund II, L.P. (collectively, the "Former Digital Media Group Shareholders") against VisionChina Media and Vision Best. Both suits were commenced in the Supreme Court of the State of New York, New York County.
In their complaint, VisionChina Media and Vision Best asserted claims for fraud and breach of contract, alleging that the defendants unlawfully induced VisionChina Media and Vision Best, through false, deceptive and misleading statements concerning Digital Media Group's financial condition and performance, to pay an inflated price to purchase Digital Media Group. Their complaint also alleged that VisionChina Media and Vision Best are owed indemnification from an escrow fund, which was established at the time of the acquisition, as a result of breaches of representations and warranties in the merger agreement. The Former Digital Media Group Shareholders alleged in their complaint that VisionChina Media and Vision Best breached certain contracts relating to the Company's acquisition of Digital Media Group by allegedly declining to make certain installment payments that the Former Digital Media Group Shareholders claimed they were entitled to receive and allegedly declining to take certain steps to facilitate the transfer of VisionChina Media stock that the Former Digital Media Group Shareholders are entitled to receive in connection with the acquisition. In their compliant, the Former Digital Media Group Shareholders are seeking specific enforcement of the contracts at issue, compensatory damages in an amount to be determined at trial, permanent and preliminary injunctive relief and such other relief as the court deems just and proper.
On February 25, 2011, the Former Digital Media Group Shareholders filed motions against VisionChina Media and Vision Best, seeking an order of attachment in the amount of US$30 million against VisionChina Media and Vision Best and directing VisionChina Media and Vision Best to transfer assets into the State of New York to satisfy a prospective judgment. They also moved for an order compelling VisionChina Media and Vision Best to remove the restrictive legend on certain VisionChina Media stock that the Former Digital Media Group Shareholders received in connection with the acquisition. They also moved for the provision of consents or authorizations required to convert the stock to American depositary shares and make them freely tradable. Additionally, the Former Digital Media Group Shareholders, together with the other defendants in the lawsuit commenced in December 2010, moved to dismiss VisionChina Media and Vision Best's contract and fraud claims.
On November 3, 2011, the Supreme Court of the State of New York entered orders deciding the pending motions filed in all of these lawsuits. The court granted the motion to dismiss VisionChina Media and Vision Best's fraud, unjust enrichment and declaratory judgment claims, as well as one of VisionChina Media and Vision Best's claims for breach of contract alleging the destruction of certain data. The court denied the motion to dismiss another contract claim asserted by VisionChina Media and Vision Best for not less than US$2,785,633. The court further granted the Former Digital Media Shareholders' motion to attach US$30 million of VisionChina Media's and Vision Best's assets to be held as security in the event that the Former Digital Media Shareholders are successful in their claims against VisionChina Media and Vision Best for breach of contract. The ruling also requires the Former Digital Media Shareholders to file a US$500,000 undertaking in the event that it is ultimately determined that they were not entitled to the attachment. Finally, the court denied the Former Digital Media Shareholders' request to compel VisionChina Media and Vision Best to release the restrictions on certain VisionChina Media stock that would facilitate the conversion of that stock to American depositary shares. The Court held that the Former Digital Media Shareholders were not entitled to such relief because they may have a claim for damages if they can establish that VisionChina Media and Vision Best wrongfully refused to release the restrictions.
VisionChina Media and Vision Best intend to appeal the Supreme Court's order that dismissed the fraud, unjust enrichment, declaratory judgment claims and breach of contract alleging the destruction of certain data and granted the motion for an order of attachment. VisionChina Media and Vision Best also intend to continue to vigorously pursue their remaining contract claim and defend against the claims asserted by the Former Digital Media Shareholders.
About VisionChina Media Inc.
VisionChina Media Inc. (Nasdaq: VISN) operates an out-of-home advertising network on mass transportation systems, including buses and subways. As of June 30, 2011, VisionChina Media's advertising network included 136,522 digital television displays on mass transportation systems in 21 of China's economically prosperous cities, including Beijing, Shanghai, Guangzhou and Shenzhen. VisionChina Media has the ability to deliver real-time, location-specific broadcasting, including news, stock quotes, weather and traffic reports, and other entertainment programming. For more information, please visit http://www.visionchina.cn.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar statements. Among other things, the quotations from management in this press release contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1 and its annual reports on Form 20-F. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
For investor and media inquiries, please contact:
In China:
Mr. Colin Wang
Investor Relations Director
VisionChina Media Inc.
Phone: +86-135-1001-0107
Email: colin.wang@visionchina.cn
Mrs. Helen Plummer
Investor Relations Advisor
VisionChina Media Inc.
Tel: +86 139-1167-2124
Email: helen.plummer@visionchina.cn
In the United States:
Ms. Jessica Barist Cohen
Ogilvy Financial, New York
Tel: +1-646-460-9989
E-mail: jessica.cohen@ogilvypr.com
