Court allows Oak, Gobi to attach $60m in VisionChina assets

The firms have been locked into a breach-of-contract lawsuit for more than 18 months with VisionChina, the media company which acquired former portfolio company DMG from them in 2009.

Justice Charles Ramos said that it was "undisputed" that VisionChina had failed to remit the payments it owed to Oak and Gobi for the asset.

However, Ramos did not rule completely for Oak and Gobi, on the grounds that VisonChina may have valid defenses to the breach-of-contract claims. He denied the venture firms' motion for summary judgment - a judgment entered by a court without a full trial - and said: "At the very least, these assertions raise triable issues of fact sufficient to defeat."

"Summary judgment was denied but that's the ‘glass is half empty' view," Gobi's general counsel, Mark Kuo, told AVCJ. "We are happy so far. Now that the judge declared there's still a single triable issue of fact remaining, we can proceed with discovery and push ahead to trial if necessary."

The litigation between VisionChina and the venture firms began in December 2010, when the Chinese company accused the vendors of fraud - a claim which the courts later threw out. Having filed a counter-claim of their own against VisionChina for failing to keep up with the anniversary payments for its purchase, Gobi and Oak were however granted an attachment on $30 million of VisionChina's assets last December.

The venture firms then went on to issue a letter calling for the replacement of VisionChina's co-founder, Limin Li, as chairman of the company's board, claiming that the business had lost 95% of its value under Li's leadership.

VisionChina is listed on NASDAQ and backed by venture capital firm Milestone Partners and digital media network Focus Media. Focus Media has recently come under fire from research firm short seller Muddy Waters, which alleges that the company lied about its business and deliberately overpaid for acquisitions in an attempt to hide losses.

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• Topics
• Greater China
• Media
• Media
• China
• Oak Investment Partners
• Gobi Partners