Business News
Valassis Announces Schedule Confirmation of Wayne County Circuit Court Lawsuit Against News America and Receives Notice Regarding NYSE Listing
Tuesday 24. February 2009 - Valassis (NYSE:VCI), one of the nation's leading media and marketing services companies, announced that, on Tuesday, Feb. 17, 2009, Wayne County Circuit Court Judge Michael Sapala formally scheduled Valassis' state law action against News America Incorporated ("News America") for May 27, 2009.
The trial had been tentatively scheduled to start on March 10, 2009. Another case also on Judge Sapala’s calendar previously scheduled to start trial that same date has not resolved, and therefore, he is unavailable on that date. Valassis originally filed the action in the State of Michigan Wayne County Circuit Court on March 9, 2007 raising common law and statutory causes of action.
In addition to the Michigan state law claims, Valassis has lawsuits pending against News America in the United States District Court, Eastern District of Michigan, for alleged violations of the Sherman Act, and in the Supreme Court of the State of California for the County of Los Angeles raising claims under California’s Cartwright, Unfair Competition and Unfair Practices Acts. These two cases are currently scheduled for trial in April and August of 2009, respectively. For more information regarding these lawsuits, see Valassis’ most recently filed Form 10-Q.
Also, we received notice from the New York Stock Exchange (NYSE) on Feb. 20, 2009, that we are not in compliance with certain continued listing standards applicable to our common stock. Specifically, the notice indicates that we are below criteria because both the average market capitalization of our common stock over a consecutive 30 trading-day period was less than $75 million and our stockholder equity was less than $75 million. As of Feb. 18, 2009, our 30 trading-day average market capitalization was approximately $70.2 million. As of Dec. 31, 2008, our stockholders’ equity was $5.4 million, down from $241.2 million as of Sept. 30, 2008, due primarily to a $245.7 million pre-tax, non-cash impairment charge related to goodwill and other intangible assets that we recorded during the fourth quarter of 2008.
Under NYSE regulations, we have 45 days from the receipt of the notice to submit a business plan that demonstrates our ability to return to compliance with the continued listing standard within 18 months of receipt of the notice. We intend to submit such a plan, which may include among other things, elements from our previously released 2009 Profit Maximization Plan (designed to reduce costs, increase production efficiencies and place focus on our greatest growth and profit opportunities) and a positive impact from both a potential asset sale as well as any repurchase of our outstanding term loans through one or more “modified Dutch” auctions during 2009.
Upon receipt of our business plan, the NYSE has 45 days to review and determine whether we have made a reasonable demonstration of our ability to come into conformity with the relevant standard within the 18-month period. The NYSE will either accept the business plan, at which time we will be subject to ongoing monitoring for compliance with the business plan, or the NYSE will not accept the business plan and we will be subject to suspension and delisting procedures. As required by the NYSE’s rules, we intend to notify the NYSE within 10 business days of receipt of the non-compliance notice of our intent to submit a plan to remedy our non-compliance.