NEW YORK, Nov. 13, 2011 /PRNewswire/ -- Shareholders of Digital Media Group Company Limited. (DMG) today said that they have begun taking steps to attach $30 million of the assets of VisionChina Media Inc. (Nasdaq: VISN), pursuant to an order granted by the New York State Supreme Court.
The DMG shareholders, US-based Oak Investment Partners and China-based Gobi Partners (Oak and Gobi) said VisionChina's Notice of Appeal, which was filed on Friday, November 11, will have no impact on their actions to attach VisionChina's assets.
In his ruling granting Oak and Gobi's motion to attach, Judge Charles E. Ramos stated that Oak and Gobi, "have demonstrated that it is more likely than not [they] will succeed on the merit of [their] claims ... Drawing all legitimate inferences in their favor, the Sellers make a showing that the Merger Agreement is a binding and valid contract ... which VisionChina breached by failing to pay the first and subsequent payments due."Commenting on VisionChina's Notice of Appeal, Mindy Morton, an attorney for Oak and Gobi and a partner of the law firm of Bergeson LLP said, "We are confident that the judge's order will be upheld on appeal. We intend to take action immediately to attach $30 million of VisionChina's assets plan, pursuant to the court's order, and intend to file a summary judgment motion this week asking the Court to grant judgment on the entire $60 million due under the Merger Agreement, plus other damages." Oak and Gobi said they expect the total damages stemming from their lawsuit against VisionChina to exceed $90 million. As of June 30, 2011, VisionChina reported having $123.5 million in cash and cash equivalents on hand. Oak and Gobi sued VisionChina for, among other things, willfully reneging on the first of two $30 million payments in connection with VisionChina's $160 million acquisition of Digital Media Group Company Limited. (DMG) in 2009. VisionChina paid the initial amount due, but failed to make the second payment of $30 million in November 2010. The final payment, which is also $30 million, is due on November 16, 2011. VisionChina sued Oak and Gobi for fraud, and sought to defend against Oak and Gobi's affirmative claims for payment based on the same purported fraud. The judge dismissed all fraud charges against Oak and Gobi, writing, "... it is plain that Visonchina is not able to maintain a viable cause of action for fraud (against Oak and Gobi)."