InfoUSA Forms Panel to Handle Suit, Probe

By Virgil Larson, Omaha World-Herald, Neb.

Dec. 27–InfoUSA Inc. said Wednesday that it had named three new board members and placed them and two other directors on a special committee to deal with a shareholder lawsuit and a federal investigation.

New to the board are George Krauss of Omaha, who has served on the boards of several local companies and is a former presiding partner at Omaha law firm Kutak Rock; Robin Chandra, a managing partner at Bessemer Venture Partners, a California firm; and Thomas Weatherford, a veteran executive with several U.S. technology companies.

Krauss and Weatherford took newly created seats. Chandra fills the vacancy created by the Dec. 19 death of Anshoo Gupta, who is not related to InfoUSA founder and chief executive Vin Gupta.

Those three, along with Bill Fairfield and Bernard Reznicek, make up the special committee for “internal investigation and derivative litigation.”

The announcement of the special committee carried no specifics on what its job is to be.

The Omaha marketing services company disclosed Nov. 20 that the Securities and Exchange Commission had asked it for documents on transactions between the company and insiders, on expense reimbursement and on “certain trading” in the company’s stock.

A lawsuit against Vin Gupta and 10 other directors and former directors was brought by Dolphin Partnership funds and Cardinal Capital Management, which together own about 10 percent of the company.

The suit, filed in the Delaware Court of Chancery, alleges that Gupta has enriched himself at shareholders’ expense and that the board is dominated by him and has failed to control his spending.

Gupta has said in interviews that the company will prove in court that the allegedly misspent money was for legitimate business expenses.

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