A Wall Street Journal video discusses Marissa Mayer, the businesswoman who was Google’s first female engineer and held key roles with the multinational corporation before being appointed president and CEO of Yahoo in July 2012. The move made the 37-year-old Mayer the youngest CEO of a Fortune 500 company, but she is now facing what CNN described as “one of the first major challenges” of her tenure after a federal judge in Mexico City ordered the company to pay a $2.7 billion judgment in a breach of contract lawsuit. While the judgment is non-final, CNN noted that Yahoo would be forced to part with nearly 36 percent of the $7.56 billion in cash it had as of September 30, 2012, if the ruling stands.
Reuters reported that Yahoo and a Mexican telephone directories company, Worldwide Directories, had reached an agreement to extend their partnership beyond Mexico into Puerto Rico, Central America, Australia and Japan. Carlos Bazan-Canabal, the founder of Worldwide Directories, sued Yahoo after a deal to produce print and online telephone directories in Mexico fell through. According to CNN, the company said it “believes the plaintiffs’ claims are without merit and will vigorously pursue all appeals.”
Because the Mexican court system does not have the same sort of transparency we are accustomed to with legal documents in the United States, information about the case and how the judgment was determined has been minimal. An analyst with J.P. Morgan told CNN there is “little clarity” around the ruling, and Business Insider asked how the market for a Mexican Yellow Pages could possibly be worth billions of dollars when “two big, publicly traded players” in the industry, Hibu and Dex One, “are negotiating with their lenders and flirting with bankruptcy right now.” Many stories noted that investors did not seem to be too concerned about the massive judgment, as Yahoo shares remained flat on the Monday following the decision.
While this is certainly an unusual case, it still demonstrates that contract disputesare matters that every business needs to take seriously. Los Angeles business litigation attorney Robert Klein has more than 25 years of experience protecting the interests of companies of all sizes, and you can find additional information about drafting contracts available on our website. If you are seeking smart, effective legal counsel for your business in the contracting process, you can contact our firm at (323) 653-3900 or complete the form on this page to have our Los Angeles breach of contract lawyer review your case.
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