Gannett Co. v. Register Publishing Co.

428 F.Supp.818 (Dist Ct. 1977)

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Nature of the Case

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Facts

Gannett (P) entered into a purchasing agreement with Register (D) for P to sell its shares of common stock in the Hartford Times and all stock of the Community Offset to D for an aggregate price of $7,000,000. The agreement called for appropriate adjustments to be made in the purchase price for the difference between current assets and liabilities. Shortly after closing the deal, D became aware that P was cooking the books and hiding inflated circulation figures. D decided not to pay P the amount due under the net asset adjustment provisions of the agreement. An audit confirmed D’s position and also confirmed that much of the information supplied by P to D prior to the execution of the agreement had been false and misleading. P sued D for failure to pay the amount due under the net current asset adjustment provision of the purchase agreement. P filed a counterclaim for breach of contract, common law fraud, and securities law violations. D sought compensatory and exemplary damages or in the alternative rescission and restitution of all benefits conferred by it on P. This was the decision of the court.