Global credit information group Experian is still withholding $19.8 million of payouts relating to its April 2007 acquisition of Australian internet monitoring firm Hitwise, according to a leaked letter to shareholders.
Click for the full letter
The letter, a copy of which was seen by ZDNet.com.au, appears to have been sent from international law firm Wilkie, Farr and Gallagher and venture capital firm Insight Venture Partners, which was an investor in Hitwise. Issued last week, it was addressed to former Hitwise shareholders, including staff who were granted stock options as part of the terms of their employment.
The letter stated that Insight was acting as the shareholders' representative and attempting to ensure that Experian abided by the Hitwise sale agreement. In particular, the letter stated that Insight was attempting to ensure that Experian released $19.8 million in payouts that had been held in escrow since the sale.
That amount acted as security to cover potential indemnity claims by Experian after the Hitwise acquisition. However, Insight appeared to be concerned about Experian's intentions for the funds, which are due to be paid to Hitwise shareholders on 7 September, 2008.
"Unfortunately, Experian has recently made broad claims against the escrow, and has, thus far, indicated that it will refuse to allow any part of the escrow to be released as originally scheduled," the letter stated.
Page 2 of the letter
Australian Hitwise spokespeople declined to comment on the issue when contacted, directing enquiries to Experian representatives. Experian's spokespeople did not respond to a request for comment.
Likewise, Insight and Wilkie, Farr and Gallagher also did not respond to a request for comment by the time of publication.
However the letter appeared to state that Experian was withholding the funds due to a number of indemnity claims it was pursuing, as per the Hitwise sale agreement: separately, with the state of New York, the Australian Taxation Office, and a company called Pagemelding.