Mexican companies sue Yahoo, law firm, allege conspiracy to avoid $2.7 billion judgment

Thu Sep 11, 2014 10:22pm EDT
 
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By Joseph Ax

NEW YORK (Reuters) - Two Mexican companies have sued Yahoo Inc (YHOO.O: Quote) and law firm Baker & McKenzie in New York federal court, accusing them of engineering a conspiracy to avoid a $2.7 billion judgment issued by a Mexican court in 2012.

In a lawsuit filed on Thursday, Worldwide Directories S.A. de C.V. and Ideas Interactivas S.A. de C.V. said Yahoo and Baker & McKenzie enlisted the help of a senior Mexican judge and other court personnel to "corrupt the appeals process and overturn the judgment."

"This is a frivolous attempt to revive interest in a meritless lawsuit, and we will vigorously defend against these baseless claims," said a Yahoo spokeswoman.

A Baker & McKenzie spokesman did not respond to requests for comment.

The case stems from a contractual dispute over deals between Yahoo and the companies over an online search project in Mexico. The companies filed a lawsuit in 2011 in Mexico, claiming Yahoo had breached its duties by terminating the agreements prematurely.

A Mexican judge issued a $2.7 billion preliminary judgment in December 2012. The size of the damages came as a surprise to investors and other observers of the tech industry.

According to Thursday’s lawsuit, Yahoo and its lawyers at Baker & McKenzie successfully reduced the award to $172,500 by instructing a corrupt Mexican federal judge to meet in secret with the appellate chief judge and “intimidate” her into slashing the damages.

The appeals court also granted Yahoo a $3 million judgment on its counterclaims against the companies as a result of the coercion, the lawsuit said.   Continued...

 
A Yahoo logo is pictured in front of a building in Rolle, 30 km (19 miles) east of Geneva, in this file picture taken December 12, 2012.    REUTERS/Denis Balibouse