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June 19, 2012 /PRNewswire-Asia/ -- VisionChina Media Inc. ("VisionChina Media" or the "Company") (Nasdaq: VISN) today reported that on
Friday, June 15, 2012, a
New York State trial court issued a ruling denying the motion of venture capital firms Gobi Partners ("Gobi") and Oak Investment Partners ("Oak") for summary judgment regarding their claim for
$60 million in post-closing consideration in connection with the
January 2010 sale to VisionChina Media of Digital Media Group (DMG).
Charles E. Ramos of the
New York State Supreme Court ruled that VisionChina Media adequately alleged that it is excused from future contractual performance by virtue of Gobi and Oak's breaches of the Merger Agreement. The decision states that VisionChina Media's "allegations of material breach," including claims of intentional destruction of electronic data that was required to be delivered to VisionChina Media pursuant to the parties' Merger Agreement, "raise triable issues of fact sufficient to defeat partial summary judgment."
In court filings made in
December 2011 in opposition to Gobi and Oak's motion for partial summary judgment, VisionChina Media detailed the destruction of DMG's entire electronic database, including emails, customer contracts and other electronic data that comprised key assets to be delivered to the Company under the Merger Agreement and the loss of which crippled the ongoing business. The
June 15 ruling enables VisionChina Media to pursue full discovery, or factual inquiry, from Gobi and Oak with respect to these and related issues.
The court's decision also addressed the issue of prejudgment attachment sought by Gobi and Oak with respect to orders of attachment they obtained in November and
December 2011. The court confirmed those prior orders of attachment and said Gobi and Oak could proceed with discovery in aid of attachment. Because the levies based upon those orders expired after 90 days, however, those levies are void and ineffective. The court also required Gobi and Oak to pay an additional
$500,000 in security pending the appeal that VisionChina Media is pursuing to overturn the
November 2011 ruling that granted the initial request for attachment.
Although Gobi and Oak had sought to bring the trial court proceedings to an end and to obtain summary judgment that they were entitled to
$60 million in post-closing consideration, the
June 15 ruling denied that request. It permits VisionChina Media to compel Gobi and Oak to furnish information relevant to allegations of their material breach of the Merger Agreement. At the same time VisionChina Media will vigorously pursue its appeal to vacate the orders of attachment and to revive its affirmative claims against Gobi and Oak for fraud and other relief.
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
March 31, 2012, VisionChina Media's advertising network included 135,762 digital television displays on mass transportation systems in 20 of
China's economically prosperous cities, including
Shenzhen, as secured by exclusive agency agreements or joint venture contract. 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
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.