NEWS26 January 2011

InfoGroup founder sued over ‘unpaid’ advisory services bill

Legal North America

US— InfoGroup founder Vin Gupta is facing a lawsuit from a New York investment bank over claims of $6.8m in unpaid fees.

Blackstone Advisory Services, an arm of the Blackstone Group, says it was hired several years ago to advise Gupta on a deal to buy a majority interest in the database marketing and market research group, according to the lawsuit.

It further alleges that the agreement was later expanded to include services related to arranging a third-party equity investment or merger.

In December 2008, Gupta stated publicly that he was “exploring a proposal” with an equity partner to make a cash bid for the firm, but would, “under appropriate circumstances, also be willing to sell his family’s shares in connection with a sale of the entire company”.

That announcement led InfoGroup to begin considering strategic alternatives, which culminated in the sale of the business to private equity firm CCMP Capital for $468m in June 2010.

Blackstone says it billed Gupta after the closing of the deal, but so far its fees haven’t been paid.

According to a report in the Wall Street Journal Gupta has denied Blackstone’s allegations, saying that he had hired the firm to help him raise debt and equity to take InfoGroup private. “They never did it,” he said.