Yahoo 2015 Annual Report Download - page 140

against Mr. de Castro. The plaintiff seeks to recoup the severance paid to Mr. de Castro, an equitable
accounting, disgorgement in favor of Yahoo, monetary damages, declaratory relief, injunctive relief,
and an award of attorneys’ fees and costs. The Company has filed a motion to dismiss the action.
On January 27, 2016, a stockholder action captioned UCFW Local 1500 Pension Fund v. Marissa
Mayer, et al., was filed in the U.S. District Court for the Northern District of California against the
Company, and certain current and former officers and directors of the Company, including all current
members of the Board. The complaint asserts both derivative claims, purportedly on behalf of Yahoo,
and class action claims, purportedly on behalf of the plaintiff and all similarly situated stockholders
who owned shares of Yahoo common stock at any time since January 27, 2013 and who continued to
own such shares through and including January 6, 2016. The complaint purports to bring claims
under the Investment Company Act of 1940, as well as claims for breach of fiduciary duty and unjust
enrichment. Plaintiff seeks to rescind Yahoo’s employment contracts with the individual defendants
because those defendants allegedly caused Yahoo to illegally operate as an unregistered investment
company in breach of their fiduciary duties. Plaintiff seeks disgorgement in favor of Yahoo, monetary
damages, rescission, declaratory relief, equitable relief, and an award of attorneys’ fees and costs.
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.
On February 16, 2015, plaintiffs filed a petition for review by the Supreme Court of Mexico, where
review is limited to constitutional questions under Mexican law. The plaintiffs’ petition was denied.
Plaintiffs then filed an additional petition seeking to reverse the denial through further review. On
September 22, 2015, the Supreme Court of Mexico issued its written decision denying that petition.
This decision concludes plaintiffs’ appeals in Mexico.
136