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MEXICO CITY (Reuters) – A plaintiff in a case against Yahoo Inc in which a Mexico City civil court made a $2.7 billion preliminary judgment against the U.S. firm said on Wednesday he and his partners were willing to accept a legal settlement for less.The ruling by the 49th Civil Court of the Federal District of Mexico City, which was issued on Friday and perplexed the tech world, involves allegations of breach of contract related to an online yellow pages listings service, according to Yahoo.
The lawsuit was brought by Worldwide Directories S.A. de C.V. and Ideas Interactivas S.A. de C.V. against Yahoo and Yahoo de Mexico, according to Yahoo.
Carlos Bazan-Canabal, who says he is a partner in both firms and is named as their strategic planning director in copies of court documents relating to the case obtained by Reuters, said the plaintiffs were prepared to listen if Yahoo made an offer.
“If we can reach a settlement with an interesting number, we would go for it,” Bazan-Canabal told Reuters, adding it could be for less than the preliminary award.
Bazan-Canabal said there were “less than five” people behind the case against Yahoo.
Yahoo believes it has “numerous” grounds to appeal against the preliminary judgment, including both errors in procedure and in application of law, a person familiar with the matter told Reuters on Monday.
Bazan-Canabal, who operates a host of websites, said he joined Yahoo in 1999 and later helped to launch Yahoo Mexico.
A Yahoo spokeswoman confirmed he worked for Yahoo Mexico, but declined to comment further.
Bazan-Canabal said the dispute centered on agreements signed between Yahoo Mexico and Ideas Interactivas between 2002 and 2004 over a business venture for an online business search function “Yahoo! Paginas Utiles” as well as printed volumes.
After initial success with the project, the two sides agreed to extend the model to other parts of the world including Puerto Rico, Central America, Australia and Japan, but Yahoo later broke the deal unilaterally, Bazan-Canabal said.
The joint agreement had been due to last until 2009, with options to extend it further, he added. Breaking the deal caused Ideas Interactivas to go bankrupt, Bazan-Canabal said.
Worldwide Directories had earlier been set up as a holding company for Ideas Interactivas, he added.
Any appeal by Yahoo is expected to be heard by a panel of three judges in a superior court in Mexico City.
Yahoo’s most recent 10Q filing, which lists major ongoing legal proceedings, makes no mention of the lawsuit.
A JPMorgan analyst said the judgment, if sustained, would cost the company an estimated 40 per cent of its 2012 cash balance, as projected by the bank.
Shares of Yahoo fell 0.2 per cent to close at $18.89 on Nasdaq.
(With reporting by Alexei Oreskovic in San Francisco; Editing by Simon Gardner and Richard Chang)
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