Yahoo 2014 Annual Report Download - page 136

amended complaint filed December 15, 2011, the lead plaintiff purports to represent a class of
investors who purchased the Company’s common stock between April 19, 2011 and July 29, 2011, and
alleges that during that class period, defendants issued statements that were materially false or
misleading because they did not disclose information relating to Alibaba Group’s restructuring of
Alipay. The complaint purports to assert claims for relief for violation of Section 10(b) and 20(a) of
the Securities Exchange Act of 1934, as amended, and for violation of Rule 10b-5 thereunder, and
seeks unspecified damages, injunctive and equitable relief, fees, and costs. On August 10, 2012, the
court granted defendants’ motion to dismiss the consolidated amended complaint. Plaintiffs have
appealed.
On March 14, 2014, a stockholder derivative action captioned Hughes Trust v. de Castro, et al. was
filed in the Delaware Court of Chancery purportedly on behalf of Yahoo against current and former
members of the Board of Directors and our former chief operating officer, Henrique de Castro. The
plaintiff alleged that the directors who approved Mr. de Castro’s employment agreement in 2012
wasted corporate assets and breached their fiduciary duties by failing to adequately inform
themselves about how much compensation Mr. de Castro would be entitled to receive. The plaintiff
further alleged that the directors failed to provide adequate disclosure regarding Mr. de Castro’s
compensation. The plaintiff asserted a claim against Mr. de Castro for unjust enrichment. Plaintiff was
seeking unspecified damages and restitution in favor of Yahoo, an order directing Yahoo to reform its
corporate governance and internal procedures, and attorneys’ fees and costs. On February 10, 2015,
the court entered an order granting the plaintiff’s request to voluntarily dismiss the action without
prejudice.
Mexico Matters. On November 16, 2011, plaintiffs Worldwide Directories, S.A. de C.V. (“WWD”), and
Ideas Interactivas, S.A. de C.V. (“Ideas”) filed an action in the 49th Civil Court of Mexico against the
Company, Yahoo! de Mexico, S.A. de C.V. (“Yahoo! Mexico”), Yahoo International Subsidiary Holdings,
Inc., and Yahoo Hispanic Americas LLC. The complaint alleged claims of breach of contract, breach of
promise, and lost profits in connection with various commercial contracts entered into among the
parties between 2002 and 2004, relating to a business listings service, and alleged total damages of
approximately $2.75 billion. On December 7, 2011, Yahoo! Mexico filed a counterclaim against WWD
for payments of approximately $2.6 million owed to Yahoo! Mexico for services rendered. On April 10,
2012, plaintiffs withdrew their claim filed against Yahoo International Subsidiary Holdings, Inc. and
Yahoo Hispanic Americas LLC.
On November 28, 2012, the 49th Civil Court of Mexico entered a non-final judgment against the
Company and Yahoo! Mexico in the amount of USD $2.75 billion and a non-final judgment in favor of
Yahoo! Mexico on its counterclaim against WWD in the amount of $2.6 million. The judgment against
the Company and Yahoo! Mexico purported to leave open for determination in future proceedings
certain other alleged damages that were not quantified in the judgment.
On December 12, 2012 and December 13, 2012, respectively, Yahoo! Mexico and the Company
appealed the judgment to a three-magistrate panel of the Superior Court of Justice for the Federal
District (the “Superior Court”). On May 15, 2013, the Superior Court reversed the judgment,
overturned all monetary awards against the Company and reduced the monetary award against
Yahoo! Mexico to $172,500. The Superior Court affirmed the award of $2.6 million in favor of Yahoo!
Mexico on its counterclaim.
Plaintiffs appealed the Superior Court’s decision to the Mexican Federal Civil Collegiate Court for the
First Circuit (“Civil Collegiate Court”). The Company appealed the Superior Court’s decision not to
award it statutory costs in the underlying proceeding. Yahoo! Mexico appealed the Superior Court’s
award of $172,500, the Superior Court’s decision not to award it additional moneys beyond the $2.6
million award on its counterclaims, and the Superior Court’s decision not to award it statutory costs.
On January 14, 2015, the Civil Collegiate Court denied all of the appeals.
132