The Blackstone Group is suing Vinod Gupta, the founder of business-to-business marketing company infoUSA, for $6.8 million, Reuters reported, citing a complaint filed with a New York state court. According to the complaint, Blackstone says Gupta owes the money as an advisory fee, even after the $463 million takeover of his company last July by private equity firm CCMP Capital Advisors, Reuters wrote.
(Reuters) – Blackstone Group LP (BX.N) has sued the founder of business-to-business marketing company infoUSA Inc to recover a $6.8 million advisory fee.
According to a complaint made public on Monday, Vinod Gupta still owes the sum even after last July’s roughly $463 million takeover of his company, now called infoGroup Inc, by private equity firm CCMP Capital Advisors LLC.
Gupta did not immediately return a call seeking comment. Blackstone declined to comment.
Blackstone filed its complaint in a New York state court 10 months after the India-born Gupta agreed to pay $7.43 million to settle a U.S. Securities and Exchange Commission lawsuit accusing him of using infoGroup as his “personal ATM.”
The SEC contended that Gupta extracted millions of dollars to fund a lavish lifestyle that included jet travel to Cancun, Italy and South Africa, and costs associated with an 80-foot yacht, several homes, more than 20 automobiles and 28 club memberships. Gupta did not admit wrongdoing in settling.
In its complaint, Blackstone said it was hired by Gupta in 2007 to advise on a transaction that would give him a majority stake in Omaha, Nebraska-based infoGroup.
Blackstone said a later amendment called for Gupta to pay “success” and “incentive” fees should various transactions take place, including an investment by a third party.
The firm said that one week before the CCMP closing, it sent Gupta a bill comprising $6.75 million of fees plus $46,641 of expenses, and that he has yet to pay this bill.
The New York Times reported the Blackstone lawsuit earlier Monday afternoon.
According to the SEC complaint, Gupta and his immediate family had at least nine U.S. homes including in Las Vegas; Aspen, Colorado; Miami; California’s Napa Valley, and both Maui and Kauai in Hawaii. [ID:nN15119311]
The case is Blackstone Advisory Services LP v. Gupta, New York State Supreme Court, New York County, No. 650165/2011.
(Reporting by Jonathan Stempel and Megan Davies in New York; Editing by Phil Berlowitz)