InfoUSA subject to delisting by NASDAQ
Data company InfoUSA received a notice from the NASDAQ stock market on April 2, stating that the company's common stock is subject to delisting because it has not yet filed its annual report on Form 10-K for the fiscal year ending December 31.
The announcement was not unexpected for the Omaha, NE-based data company. Early last month, InfoUSA announced that it would not meet the March 17 deadline for filing.
The delay is the result of ongoing shareholder litigation and a related “informal investigation” into the company by the US Securities and Exchange Commission, according to a report InfoUSA filed with the commission.
In a statement, InfoUSA said that it will request a hearing before the NASDAQ Listing Qualification Panel. As long as InfoUSA requests a hearing by April 9, the company's stock will remain listed on the NASDAQ Global Select Market until a final decision is made. If a hearing request is not filed by April 9, then the company's common stock will be suspended at the start of business April 11.
Stormy Dean, InfoUSA's CFO, did not respond to requests for comment by press time.
In 2005, shareholder hedge funds Dolphin Limited Partnership and Dolphin Financial Partners filed suit in a Delaware Court alleging that InfoUSA founder and CEO Vinod Gupta had spent corporate funds on personal expenses.
In response to the shareholder's litigation, InfoUSA's board of directors formed a special litigation committed on December 24, 2007. According to court papers, the five-member committee consists of “three newly appointed members” of InfoUSA's board as well as two members determined by the court to be “disinterested.”
The committee has since moved to stay the case for 150 days in order “to investigate the claims and issues and to determine what action is in the best interests of the Company's shareholders.” On March 17, this request was granted by Chancellor William B. Chandler III, who agreed to stay the case until June 30.