**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.  20549**

 

**FORM 10-Q**

 

**(Mark One)**

 
| **ý** | ** ** | **Quarterly Report Pursuant to  Section 13 or 15(d) of The Securities Exchange Act of 1934.** |
|------------|------------|---------------------------------------------------------------------------------------------------------|

 

**For the quarterly period ended June 30,2005**

 
| **o** | ** ** | **Transition report pursuant to  Section 13 or 15(d) of the Securities Exchange Act of 1934.** |
|-------|------------|----------------------------------------------------------------------------------------------------------|

 

**Commission file number 333-108592**

 

**INFORMATION RESOURCES, INC. LITIGATIONCONTINGENT PAYMENT RIGHTS TRUST**

(Exact name of registrant as specified in itscharter)

 
| **Delaware**                                                                | ** ** | **20-0271216**                       |
|-----------------------------------------------------------------------------|------------|--------------------------------------|
| (State or other jurisdiction of  incorporation or  organization)            |       | (I.R.S. Employer Identification No.) |
|                                                                        |       |                                 |
| **150 North Clinton Street, Chicago, Illinois  60661**                      |
| (Address of principal executive offices)  (Zip Code)                        |
|                                                                        |       |                                 |
| Registrant’s telephone number, including  area code **(312) 726-1221** |

 

Indicate by check mark whether the registrant (1) has filed allreports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90days.   Yes  ý   No  o

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Rule 12b-2 of the Act.) Yes  ý   No  o

 

At July 25, 2005, there were 32,135,745 rights certificates, nopar value, outstanding.

 

 

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**PART I — FINANCIAL INFORMATION**

 

**Item 1.  *FinancialStatements.***

 

**INFORMATION RESOURCES, INC. LITIGATIONCONTINGENT PAYMENT RIGHTS TRUST**

 

**BALANCE SHEETS**

 
| ** **                                                                                                                                                        | ** ** | **June 30, 2005** | ** ** | **December 31, 2004** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------|------------|----------------------------|------------|
| ** **                                                                                                                                                        | ** ** | **(Unaudited)**        | ** ** | ** **                 | ** ** |
| **ASSETS**                                                                                                                                                        |       |                   |       |                       |       |
|                                                                                                                                                              |       |                   |       |                       |       |
| TOTAL ASSETS                                                                                                                                                      |       | $                      | —     |                       | $          | — |   |
|                                                                                                                                                              |       |                   |       |                       |       |
| **LIABILITIES AND CERTIFICATEHOLDERS’ EQUITY**                                                                                                               |       |                   |       |                       |       |
|                                                                                                                                                              |       |                   |       |                       |       |
| TOTAL LIABILITIES                                                                                                                                                 |       | $                      | —     |                       | $          | — |   |
| CERTIFICATEHOLDERS’ EQUITY                                                                                                                                   |       |                   |       |                       |       |
| Certificateholders’ Equity Certificates, no  par value, 32,259,364 authorized, of which 32,135,745 and 32,128,143 were  issued and outstanding, respectively |       | —                 |       | —                     |       |
| Contributed Capital                                                                                                                                               |       | 454,587                |       | 313,689                    |       |
| Accumulated Deficit                                                                                                                                               |       | (454,587               | )          | (313,689                   | )          |
| Total Certificateholders’ Equity                                                                                                                             |       | —                 |       | —                     |       |
|                                                                                                                                                              |       |                   |       |                       |       |
| TOTAL LIABILITIES AND CERTIFICATEHOLDERS’  EQUITY                                                                                                            |       | $                      | —     |                       | $          | — |   |

 

The accompanying notes to financialstatements arean integral part of these statements.

 

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**INFORMATION RESOURCES, INC. LITIGATIONCONTINGENT PAYMENT RIGHTS TRUST**

 

**STATEMENT OF OPERATIONS**

**(UNAUDITED)**

 
| ** **         | ** ** | **Three Months  Ended** | ** ** | **Three Months  Ended** | ** ** | **Six Months   Ended** | ** ** | **Six Months   Ended** | ** ** |
|--------------------|------------|-------------------------|------------|-------------------------|------------|------------------------|------------|------------------------|------------|
| ** **         | ** ** | **June 30, 2005**  | ** ** | **June 30, 2004**  | ** ** | **June 30, 2005** | ** ** | **June 30, 2004** | ** ** |
| REVENUE            |       | $                       | —     |                    | $          | —                 |       | $                      | —     |   | $ | — |   |
|               |       |                    |       |                    |       |                   |       |                   |       |
| EXPENSES           |       |                    |       |                    |       |                   |       |                   |       |
| Rights Agents fees |       | (30,000                 | )          | (30,000                 | )          | (60,000                | )          | (60,000                | )          |
| Legal fees         |       | (15,142                 | )          | (21,624                 | )          | (64,095                | )          | (79,377                | )          |
| Audit fees         |       | (6,625                  | )          | —                  |       | (13,250                | )          | (15,000                | )          |
| Other fees         |       | (1,981                  | )          | (8,014                  | )          | (3,553                 | )          | (8,014                 | )          |
|               |       |                    |       |                    |       |                   |       |                   |       |
| Total expenses     |       | (53,748                 | )          | (59,638                 | )          | (140,898               | )          | (162,391               | )          |
|               |       |                    |       |                    |       |                   |       |                   |       |
| Net loss           |       | (53,748                 | )          | (59,638                 | )          | $                      | (140,898   | )                      | $          | (162,391 | ) |
|                    |            |                         |            |                         |            |                        |            |                        |            |  |  |  |  |

 

The accompanying notes to financialstatements arean integral part of these statements.

 

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**INFORMATION RESOURCES, INC.  LITIGATION CONTINGENT PAYMENT RIGHTS TRUST**

 

**STATEMENT OF CASH FLOWS(UNAUDITED)**

 

 
| ** **                                         | ** ** | **Six Months Ended**   | ** ** | **Six Months Ended**   | ** ** |
|----------------------------------------------------|------------|------------------------|------------|------------------------|------------|
| ** **                                         | ** ** | **June 30, 2005** | ** ** | **June 30, 2004** | ** ** |
| CASH FLOWS FROM OPERATING ACTIVITIES:              |       |                   |       |                   |       |
|                                               |       |                   |       |                   |       |
| Net loss                                           |       | $                      | (140,898   | )                      | $          | (162,391 | ) |
|                                               |       |                   |       |                   |       |
| Net cash used by operating activities              |       | (140,898               | )          | (162,391               | )          |
|                                               |       |                   |       |                   |       |
| CASH FLOWS FROM FINANCING ACTIVITIES:              |       |                   |       |                   |       |
|                                               |       |                   |       |                   |       |
| Capital contribution from IRI  Holdings, Inc. |       | 140,898                |       | 162,381                |       |
|                                               |       |                   |       |                   |       |
| Net cash provided by financing activities          |       | 140,898                |       | 162,391                |       |
|                                               |       |                   |       |                   |       |
| Net change in cash and cash equivalents            |       | —                 |       | —                 |       |
|                                               |       |                   |       |                   |       |
| Cash and cash equivalents at beginning of  period  |       | —                 |       | —                 |       |
|                                               |       |                   |       |                   |       |
| Cash and cash equivalents at end of period         |       | $                      | —     |                   | $          | — |   |

 

The accompanying notes to financialstatements arean integral part of these statements.

 

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**INFORMATION RESOURCES, INC. LITIGATIONCONTINGENT PAYMENT RIGHTS TRUST**

**NOTES TO FINANCIAL STATEMENTS**

**(UNAUDITED)**

 

**1.     SUMMARYOF ACCOUNTING POLICIES**

 

**Principles of Presentation**

 

The Information Resources, Inc.Litigation Contingent Payment Rights Trust (the “trust”) is a statutory trustcreated under Delaware law pursuant to an initial declaration of trust and thefiling of a certificate of trust with the Delaware Secretary of State on August 27,2003. The trust was created inconnection with the tender offer by Gingko Acquisition Corporation, awholly-owned subsidiary of IRI Holdings, Inc. (formerly known as GingkoCorporation), to purchase all outstanding shares of Information Resources, Inc.common stock (and associated preferred share purchase rights) for $3.30 net pershare in cash, plus one contingent value rights certificate (“RightsCertificate”) per share, and the subsequent second-step merger ofGingko Acquisition Corp. with and into Information Resources pursuant tothe Agreement and Plan of Merger dated as of September 7, 2003, asamended, by and among Information Resources, IRI Holdings, Inc. and GingkoAcquisition Corp. The second-step merger wascompleted on December 12, 2003.

 

The trust has no business operations. The assets of the trustconsist primarily of the right to receive a portion of any proceeds received byInformation Resources in any judgment or settlement in the litigation (the “antitrustlitigation”) brought by Information Resources against The Dun &Bradstreet Corp., The A.C. Nielsen Company (now owned by VNU, N.V.) and IMSInternational, Inc. in the United States District Court for the SouthernDistrict of New York, entitled Information Resources, Inc. v. The Dun &Bradstreet Corp., et. al. No. 96 CIV. 5716 (as described below under “TheLitigation”).

 

**Interim Financial Statements**

 

The interim financial statements are unaudited, but include all adjustmentsnecessary (consisting of normal recurring adjustments), in the opinion of thelitigation trustees, for a fair statement of financial position and results ofoperations for the period presented.  Thepreparation of interim financial statements necessarily relies on estimates,requiring the use of caution in estimating results for the full year based oninterim results of operations.

 

**2.     THELITIGATION**

 

The following descriptionof the antitrust litigation has been obtained from publicly available documentsfiled with the Securities and Exchange Commission by Information Resources, asupdated from time to time in publicly available documents filed with theSecurities and Exchange Commission by the trust. It does not purport to be afull or complete description of the legal or factual issues presented, thecourt opinions rendered or the relevant law.

 

GENERAL. On July 27, 1996, Information Resources filed anantitrust lawsuit against The Dun & Bradstreet Corp., A.C. NielsenCompany and IMS International, Inc. in the United States District Courtfor the Southern District of New York entitled Information Resources, Inc.v. The Dun & Bradstreet Corp., et al. No. 96 CIV. 5716. In thelawsuit, Information Resources alleged that the defendants violated Sections 1and 2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, and the common lawby engaging in a series of unlawful practices through which InformationResources claimed that defendants attempted to regain monopoly power in theU.S. market for retail tracking services and exclude competition from 30markets outside the U.S., where Nielsen dominated. Through the antitrustlitigation, Information Resources sought to enjoin those practices and torecover damages in excess of $650 million, before trebling. InformationResources demanded a trial by jury, and the case has been assigned to theHonorable Louis L. Stanton. It is Information Resources’ position that itcontinues to suffer damages to this day as a result of the defendants’allegedly unlawful practices which it believes were aimed at underminingcompetition by financially crippling Information Resources. InformationResources is represented

 

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by the law firms of Hagens Berman Sobol Shapiro LLP (formerly HagensBerman LLP), Freeborn & Peters LLP and Fried, Frank, Harris, Shriver &Jacobson LLP in the litigation.

 

RECENT EVENTS. On February 27, 2004, Information Resources filedits expert report prepared by Professor Franklin Fisher, who, among otherthings, opined both on defendants’ liability and Information Resources’damages. In general, Professor Fisher concluded that defendants engaged in aseries of anticompetitive practices, both in the U.S. and abroad, aimed atmonopolizing the U.S. market and excluding Information Resources from non-U.S.markets. Professor Fisher opined that a dangerous probability existed whendefendants undertook these practices that they would have monopolized the U.S.market had government authorities not intervened. On February 27, 2004,Information Resources also notified the court that, in order to expedite theprosecution of the antitrust litigation, it had elected not to pursue asseparate claims for damages any of the following: 1) *per se*tying claim (Count I); 2) monopolization and attempted monopolization ofcertain export markets, specifically Australia, Austria, Belgium, Brazil,Denmark, Finland, Indonesia, Ireland, Hong Kong, Korea, Luxembourg, Malaysia,New Zealand, Norway, Philippines, Portugal, Singapore, Taiwan, Thailand andSwitzerland (Counts III and IV); 3) monopoly leveraging (Count VI); or 4)tortious interference with contract and prospective business relationship(Counts VII and VIII). As of October 31, 2004, fact discovery in the casewas completed.

 

On September 3, 2004, defendants filed two new motions: (1) aMotion for Reconsideration of the court’s December 7, 1998 ruling that theEuropean Commission’s Statement of Objections against defendants would bereceived into evidence at trial, and (2) a Motion inLimineseeking to exclude from trial evidence of certain of defendants’ retailtracking contracts. On December 3, 2004, the court held that InformationResources was barred from arguing that Nielsen’s pricing practices ordiscounts, including its bundling practices, were illegal or anti-competitiveunless it could prove that they involved prices below short-run averagevariable costs, calculated without the inclusion of Nielsen’s fixed operationscosts. On January 27, 2005, the court issued a stipulated order dismissingall of Information Resources’ remaining claims with prejudice and on the meritsfor the purpose of allowing Information Resources to take an immediate appeal.At the same time, the court also entered a final judgment against InformationResources.

 

Effective February 1, 2005, Information Resources filed a Noticeof Appeal appealing to the United States Court of Appeals for the SecondCircuit the final judgment entered against it on January 27, 2005,including the court’s January 27, 2005 order and its December 3, 2004ruling, as well as its July 12, 2000 and February 6, 2001 orderspursuant to which the court denied Information Resources and/or itssubsidiaries the right to sue under the Sherman Act for damages suffered inthose European markets where Information Resources sold its InfoScan servicesthrough its subsidiaries. On April 15, 2005, Information Resources, asappellant, filed its brief in the Second Circuit Court of Appeals.  Appellees filed their responsive brief on May 16,2005. Information Resources then filed its reply brief on June 7, 2005.All briefs filed in this case with the Second Circuit Court of Appeals are amatter of public record and should be available for viewing in the clerk’soffice of the Second Circuit Court of Appeals. Hagens Berman, Information Resources’ lead trial counsel in this case,has also posted Information Resources’ April 15, 2005 appellate brief,appellees’ May 16, 2005 responsive brief and Information Resources’ June 7,2005 reply brief on its website at www.hbsslaw.com.  All other materials filed with the SecondCircuit Court of Appeals in this case, if publicly available, should beobtained directly from the clerk’s office of the Second Circuit Court ofAppeals.

 

DAMAGES. In its original complaint, filed in 1996, InformationResources sought damages in excess of $350 million before trebling. As setforth above, on February 27, 2004, Information Resources filed the expertreport of Professor Fisher. In that report, Professor Fisher opined thatInformation Resources has suffered damages of between $545.4 million and $615.5million (prior to trebling) in the U.S. market as a result of defendants’practices that Professor Fisher has concluded are anticompetitive and throughwhich Professor Fisher concludes defendants sought to monopolize the U.S.market. He has also opined that Information Resources suffered damages of $21.0million in Canada and $15.2 million in Mexico as a result of practices thatProfessor Fisher has concluded were anticompetitive and excluded InformationResources from these markets. If Information Resources succeeds on its appealbefore the Second Circuit Court of Appeals in its entirety, such that the finaljudgment, including the January 27, 2005 order, the July 12, 2000order and the February 6, 2001 order, are reversed, Information Resourceswill likely seek an immediate trial of all claims that were dismissed by the January 27,2005 order, as well as those claims that Information Resources and/or itssubsidiaries were prevented from pursuing by the July 12, 2000 and the February 6,2001 orders. In this event, Information Resources’

 

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damage claim will increase by an amount not yet determined, but inexcess of those damages calculated in the expert report of Professor FranklinFisher initially filed on February 27, 2004, for the additional lossessuffered in those European markets where Information Resources sold itsservices through subsidiaries.

 

**3.     CLAIMSEXPENSES / ESCROW ACCOUNT**

 

Claims expenses are generally incurred and paid by InformationResources and are then reimbursed to Information Resources out of the escrowaccount referred to in the next paragraph. “Claims expenses” means the sum ofall direct expenses incurred after the date of the merger agreement by IRIHoldings, Inc., Information Resources, Information Resources’subsidiaries, and their affiliates to prosecute the antitrust litigation,generally (i) including any amounts paid to or on behalf of the rightsagents (the persons responsible for directing the antitrust litigation for thebenefit of Information Resources and the rights certificate holders) but (ii) excluding(A) contingency-based fees, (B) any payment of the independentaccounting firm costs and expenses, (C) any fees, expenses or costsassociated with the trust and (D) any fees, expenses or costs associatedwith registering the rights certificates under the Securities Act or any fees,expenses or costs associated with complying with the Securities Act, theSecurities Exchange Act of 1934 and other securities laws. Claims expenses alsoinclude (a) certain amounts payable to IRI Holdings, Inc. in theevent that the rights agents direct employees of IRI Holdings, Inc.,Information Resources, Information Resources’ subsidiaries, or their affiliatesto perform certain tasks in connection with the antitrust litigation and (b) specifiedcosts incurred by IRI Holdings, Inc. in obtaining credit support for itsobligation to fund claims expenses. As of June 30, 2005, no amounts wereowed to IRI Holdings, Inc. for employee time referred to in subparagraph (a) aboveor for credit support costs referred to in subparagraph (b) above.

 

Pursuant to the contingent value rights agreement, on December 12,2003 IRI Holdings, Inc. placed the cash amount of $10 million, plusinterest in the amount of $45,548, in an escrow account held by LaSalle BankNational Association as escrow agent, free of any liens or encumbrances of anykind (except as permitted in the contingent value rights agreement), to supportthe prosecution of the antitrust litigation and the payment of claims expenses.The escrow account is in the name of Information Resources but is restricted inuse to funding claims expenses for the antitrust litigation. As of June 30,2005, the escrow account balance was $3,194,810.

 

As of May 14, 2004, Information Resources engaged Hagens BermanSobol Shapiro LLP (formerly Hagens Berman LLP) on a full contingency fee basisto serve as Information Resources’ lead trial counsel in the antitrustlitigation, including any appellate activity and retrial if necessary. Based onthe contingency fee agreement with Hagens Berman, as well as agreements now inplace with other professionals involved in the antitrust litigation,representations made by these professionals, and facts known to the rightsagents today, the rights agents believe that the trust will have adequate fundsto prosecute the litigation, including the current appellate activity and anyother appellate activity or retrial that may be necessary.  However, given the unpredictable nature oflitigation generally, there can be no assurances that this will be the case.If, for any reason, the trust were not to have adequate funds to fullyprosecute the litigation, this could adversely affect the litigation, decreasethe amount of any payments to be made in connection with the litigation andincrease the possibility that no payments will be made in connection with thelitigation.

 

While the rights agents are not currently considering raisingadditional funds, the declaration of trust will permit the litigation trusteesof the trust, upon the instruction of the CVR Rights Agents, to raise funds topay expenses of the antitrust litigation in excess of $10 million byeither causing the trust to incur indebtedness that represents debt of thetrust (and not an ownership interest) for United States Federal income taxpurposes or causing the trust to issue additional rights certificates. Any suchindebtedness will likely represent a prior claim on the assets of the trust,including any rights certificate payment amounts received pursuant to thecontingent value rights agreement, and may reduce the aggregate amountsavailable for distribution to rights certificate holders. Any issuance ofadditional rights certificates will have a dilutive effect on rightscertificate holders, reducing the percentage of the total rights certificatepayment amount that holders receive with respect to each rights certificate. Asof the date hereof, the litigation trustees have taken no actions to raiseadditional funds. There can be no assurance that the trust will be able toraise additional funds should this become necessary or, if the trust is able toraise those funds, that the terms of that financing will be reasonable. If thetrust is unsuccessful in raising additional funds, and if the failure toprosecute the antitrust litigation results in the dismissal of InformationResources’ claims, there will be a possibility of no payment on the rightscertificates.

 

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Pursuant to the contingent value rights agreement, InformationResources will generally be responsible for the expenses of the trust, subjectto Information Resources’ prior approval of those expenses. InformationResources will also be responsible for all expenses relating to theindemnification obligations of the trust described in the Registration Statement on Form S-4with respect to the rights certificates, as filed by the trust with, anddeclared effective by, the SEC on October 30, 2003 (SEC File Number 333-108592)(the “Prospectus”) or compliance with securities laws and the rules ofthe OTC Bulletin Board. Information Resources will not be responsible for theexpenses of the trust relating to indebtedness for borrowed money and asdiscussed above will be reimbursed for “claims expenses.” Any expenses notimposed on Information Resources as described above will be general obligationsof the trust, payable out of the trust’s assets (including out of any rightscertificate payment amounts received pursuant to the contingent value rightsagreement). Information Resources will be entitled to deduct from the amountspayable to the trust under the contingent value rights agreement certainexpenses of the trust described in the contingent value rights agreement.

 

**4.     COMPENSATIONAND EXPENSES OF RIGHTS AGENTS**

 

Beginning December 2003,the rights agents appointed by the Board of Directors ofInformation Resources that was in place prior to the completion of the merger,referred to as the CVR Rights Agents, are each to be paid at least $5,000 permonth on the first day of each month until the last rights certificate paymentdate, and the independent rights agent appointed by the other rights agents,referred to as the Independent Rights Agent, may be paid a fair and reasonableamount of compensation until the last payment date that is agreed to by amajority of the rights agents (other than the Independent Rights Agent). Thesepayments are payable as claims expenses. Generally, all reasonable expenses anddisbursements incurred by the rights agents in connection with the discharge oftheir duties will also be payable by Information Resources as claims expenses.The rights agents appointed by the current Board of Directors of InformationResources, referred to as the Parent Rights Agents, are not entitled to anycompensation for their service as Parent Rights Agents. As of June 30,2005, the total amount of $60,000 was incurred as compensation payments to theCVR Rights Agents for the first half of 2005. Mr. Travis Rhodes, thecurrent Independent Rights Agent, has not sought any compensation in connectionwith his services as the Independent Rights Agent.

 

**5.     PAYMENTSTO CERTIFICATEHOLDERS**

 

Each rights certificate entitles its holder to receive a pro rataportion of any amount received by the trust in respect of antitrust litigationproceeds under the terms of the contingent value rights agreement. Pursuant tothe terms of the contingent value rights agreement, the trust will be entitledto be paid by IRI Holdings, Inc. an amount equal to 68% of any proceedsreceived by Information Resources in respect of the antitrust litigation(whether by settlement, judgment or otherwise), to the extent such proceeds areequal to or less than $200 million, and 75% of any such proceeds in excessof $200 million, in each case subject to adjustments described in theProspectus for certain items, including for taxes that Information Resourceswill be required to pay on the recovery (assumed to be at a rate of 34%) andany contingency-based fees payable to outside counsel in connection with theantitrust litigation. The remaining 32% of any such proceeds, to the extentsuch proceeds are equal to or less than $200 million, and 25% of any suchproceeds in excess of $200 million (again, in each case, subject tocertain adjustments described in the Prospectus) will be retained and remainthe property of Information Resources and its then-current owners.

 

The trust will make payments from time to time to the holders of rightscertificates upon the receipt of rights certificate payment amounts from IRIHoldings, Inc. pursuant to the contingent value rights agreement. Thepayment dates will be determined by the litigation trustees of the trust and,with respect to any receipt of rights certificate payment amounts, will be nomore than 60 days following the receipt of those amounts. On each paymentdate, the institutional trustee of the trust will transfer the aggregate rightscertificate payment amount to the payment agent designated pursuant to thedeclaration of trust, and the payment agent will promptly make payments to theholders.

 

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**ITEM 2.   *Management’sDiscussion and Analysis of Financial Condition and Results of Operations.***

 

**Introduction**

 

As of 1996, Information Resources, Inc. (“Information Resources”)has been involved in antitrust litigation (the “antitrust litigation” or the “litigation”)against The Dun & Bradstreet Corp., A.C. Nielsen Company (now owned byVNU, N.V.) and IMS International, Inc. (For a complete description of thelitigation and its current status, see “The Litigation” below.) In December 2003,all of the outstanding shares of Information Resources common stock wereacquired by Gingko Acquisition Corp. pursuant to a tender offer and subsequentmerger of Gingko Acquisition Corp. with and into Information Resources. Inconnection with this acquisition, the Information Resources, Inc.Litigation Contingent Payment Rights Trust (the “trust”) was created primarilyto distribute any proceeds from the litigation received by the trust to holdersof rights certificates. As part of the merger consideration paid by GingkoAcquisition Corp., certain shareholders of common stock of Information Resourcesreceived contingent value rights certificates (“rights certificates”), whichrepresent undivided beneficial interests in the assets of the trust. The rightscertificates entitle the holders to a pro rata portion of any proceeds receivedby Information Resources in the litigation. Set forth below are descriptionsof: (i) the trust; (ii) the rights certificates and the rightsthereunder; (iii) payments made to the trust; (iv) expenses andescrow fund; (v) the litigation and the management thereof; (vi) materialfederal income tax consequences; and (vii) a summary of financialinformation. Also below is a discussion of certain risk factors that may affectthe trust and the rights of holders of the rights certificates.

 

**Description of the Trust**

 

The trust is a statutorytrust created under Delaware law pursuant to an initial declaration of trustand the filing of a certificate of trust with the Delaware Secretary of Stateon August 27, 2003. The trust was createdin connection with the tender offer by Gingko Acquisition Corp., a wholly-ownedsubsidiary of IRI Holdings, Inc. (formerly known as Gingko Corporation),to purchase all outstanding shares of Information Resources common stock (andassociated preferred share purchase rights) for $3.30 net per share in cash,plus one rights certificate per share, and the subsequentsecond-step merger of Gingko Acquisition Corp. with and into InformationResources pursuant to the Agreement and Plan of Merger dated as of September 7,2003, as amended, by and among Information Resources, Gingko Corporation andGingko Acquisition Corp.  The second-stepmerger was completed on December 12,2003. The Registration Statement on Form S-4 with respect to the rightscertificates referred to in this document was filed by the trust with, anddeclared effective by, the SEC on October 30, 2003 (SEC File Number 333-108592)(the “Prospectus”).

 

The assets of the trust consist primarily of the right to receivea portion of any proceeds received by Information Resources in any judgment orsettlement in the litigation brought by Information Resources against TheDun & Bradstreet Corp., A.C. Nielsen Company and IMS International, Inc.in the United States District Court for the Southern District of New York,entitled Information Resources, Inc. v. The Dun & BradstreetCorp., et. al. No. 96 CIV. 5716 (as described below under “The Litigation”).

 

Thetrust has no business operations. The trust was formed for thesole purpose of:

 

• issuing the rights certificates;

• holding and enforcing the contingent valuerights agreement described below;

• making payments to holders of rightscertificates in respect of proceeds, if any, of the antitrust litigation;

• incurring debt or issuing additional rightscertificates, when permitted; and

• taking actions that are reasonably necessaryand incidental to the foregoing.

 

**Description of RightsCertificates and Rights Thereunder**

 

An amended and restateddeclaration of trust, dated as of October 31, 2003 (the “declaration oftrust”), governs the administration of the trust. Becauseof the nature of the trust pursuant to the declaration of trust, there are noemployees, no board of directors, and no board audit committee. The twolitigation trustees (the “litigation trustees”) appointed pursuant to thedeclaration of trust, together with the institutional trustee, Wachovia Bank,N.A., perform certain trust functions under the terms of the declaration oftrust. The litigation trustees are Joseph P. Durrett, former Chief ExecutiveOfficer and Chairman of the Board of Directors of Information Resources,

 

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andMonica M. Weed, former General Counsel of Information Resources. The litigationtrustees are not entitled to any compensation for serving as litigationtrustees but the litigation trustees also serve as rights agents and receivecompensation in such capacity (see “—Compensationand Expenses of the Rights Agents” below). The litigation trustees areresponsible for establishing and maintaining disclosure controls and proceduresand internal controls. Under the terms of the contingent value rightsagreement, however, the antitrust litigation is to be directed by a body offive rights agents (the “rights agents”) rather than by the litigation trustees(see “Management of the Litigation” below).

 

The declaration of trustalso governs the terms and conditions of the rights certificates. The rightscertificates represent assignable and transferable undivided beneficialinterests in the assets of the trust. Each rights certificate entitles itsholder to receive a pro rata portion of any amount received by the trust inrespect of litigation proceeds under the terms of the contingent value rightsagreement described below. As a result of the acquisition by Gingko Acquisition Corp. of alloutstanding shares of Information Resources common stock, there were32,259,364 rights certificates authorized and issuable. At June 30, 2005,32,135,745 rights certificates had been issued and were outstanding as follows:

 
| **RECIPIENTS OF RIGHTS CERTIFICATES**                           | ** ** | **NUMBER OF RIGHTS  CERTIFICATES ISSUED** | ** ** |
|-----------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                      | ** ** | ** **                                | ** ** |
| Information Resources  common stockholders                      |       | 30,453,279                                |       |
|                                                            |       |                                      |       |
| Information Resources  stock option and restricted stockholders |       | 1,682,466                                 |       |
|                                                            |       |                                      |       |
| Total rights  certificates issued                               |       | 32,135,745                                |       |

 

At June 30, 2005, 3,608 rights certificates had not beenissued relating to the fact that the trust had not yet received completedocumentation from all stock or stock option holders and further relating tothe fact that certain holders of shares of Information Resources stock hadnotified Information Resources that they intended to exercise their appraisalrights with respect to a total of 3,000 shares of Information Resources stock.The time period for exercising appraisal rights has since expired and bothInformation Resources and the transfer agent have contacted these holders toencourage them to surrender their certificates in exchange for mergerconsideration consisting of $3.30 net per share in cash, plus one rightscertificate per share.

 

The rights certificates arefreely transferable by the holders of the rights certificates under theSecurities Act of 1933 (the “Securities Act”) and under the terms of thedeclaration of trust, except for the following restrictions:

 

• holdersof rights certificates who may be deemed to be “affiliates” of the trust forpurposes of Rule 145 under the Securities Act as of the date of receiptmay not sell their rights certificates, except pursuant to an effectiveregistration statement under the Securities Act or an applicable exemption fromthe registration requirements of the Securities Act;

• none ofIRI Holdings, Inc., its successors, or any of their respectivesubsidiaries or affiliates may, as a result of that transfer, individually orcollectively obtain beneficial ownership (as defined by Rule 13d-3 underthe Exchange Act of 1934) of 15% or more of the rights certificates thenoutstanding; and

• notransfer of a rights certificate may be made to any defendant adverse toInformation Resources in the antitrust litigation or to any affiliate,associate or agent of that defendant.

 

An amended contingent valuerights agreement, dated as of October 31, 2003 (the “contingent valuerights agreement”) governs the terms of management of the antitrust litigationand the obligations of IRI Holdings, Inc. to make cash payments to thetrust in respect of proceeds received in the antitrust litigation. Pursuant tothe terms of the contingent value rights agreement, the trust will be entitledto be paid by IRI Holdings, Inc. an amount equal to 68% of any proceedsreceived by Information Resources in respect of the antitrust litigation(whether by settlement, judgment or otherwise), to the extent such proceeds areequal to or less than $200 million, and 75% of any such proceeds in excessof $200 million, in each case subject to adjustments described for certainitems, including for taxes that Information Resources will be required to payon the recovery (assumed to be at a rate of 34%) and any contingency-based feespayable to outside counsel in connection with the antitrust litigation. The

 

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remaining 32% of any suchproceeds, to the extent such proceeds are equal to or less than$200 million, and 25% of any such proceeds in excess of $200 million(again, in each case, subject to certain adjustments described in theProspectus) will be retained and remain the property of Information Resourcesand its then-current owners.

 

**Payments Made To the Trust**

 

APPROVAL PROCESS FORPAYMENTS MADE TO THE TRUST. Under the terms of the contingent value rightsagreement, as promptly as practicable, but in no event later than 30 daysafter each receipt by Information Resources or its subsidiaries or any of theiraffiliates of any litigation proceeds (other than litigation proceeds receivedas a result of a settlement decision) or after a determination that nolitigation proceeds will be received, IRI Holdings, Inc. will deliver tothe rights agents a certificate (a “litigation proceeds certificate”) whichwill include, among other things:

 

• theamount of any cash proceeds and a detailed description of any non-cash proceedsreceived;

• the fairmarket value of any non-cash proceeds received, the methodology used, andcalculations made, to determine that fair market value;

• anitemized list of the claims expenses (as defined below) incurred to date;

• anitemized list of expenses incurred by Information Resources (directly or byreimbursement) to permit the trust to comply with securities laws or the rules ofthe OTC Bulletin Board (as described below under “—Expenses of the Trust”) orin connection with the registration of the rights certificates under theSecurities Act; and

• thecalculation of the amount to be paid to the trust with respect to the litigationproceeds received (the “rights certificate payment amount”).

 

Within 30 days ofdelivery of a litigation proceeds certificate, each CVR Rights Agent (asdefined in “Management of the Litigation” below) will give written notice toIRI Holdings, Inc. and each of the other rights agents specifying whetherhe or she agrees with or objects to the litigation proceeds certificate and therights certificate payment amount. If each CVR Rights Agent agrees, the rightscertificate payment amount will be as set forth in the litigation proceedscertificate. If either CVR Rights Agent objects, the contingent value rightsagreement provides that such CVR Rights Agent will promptly deliver to IRIHoldings, Inc. and to each other rights agent a certificate specifying eachobjection. If the other CVR Rights Agent does not agree with the first CVRRights Agent’s objections, then the rights certificate payment amount will bethe amount set forth in the litigation proceeds certificate. If, within tendays of the delivery of one CVR Rights Agent’s objections, the other CVR RightsAgent agrees, in whole or in part, with the objections, the contingent valuerights agreement states that IRI Holdings, Inc. and the rights agents willsubmit the disputed matters to a mutually agreed upon independent publicaccounting firm of national standing that has expertise in the valuation ofassets and properties. If that accounting firm determines that those disputedmatters were correct as reflected in the litigation proceeds certificate, therights certificate payment amount will be the amount set forth in thelitigation proceeds certificate. If, however, the accounting firm determinesthat any of the disputed matters were incorrect in any respect (whether or notmaterial) as reflected in the litigation proceeds certificate, the independentaccounting firm’s resulting calculation of the rights certificate paymentamount will be binding on all parties to the contingent value rights agreement.

 

If the rights certificatepayment amount set forth in the accounting firm’s determination is greater thanthat determined by IRI Holdings, Inc., the rights certificate paymentamount will be increased by the interest on that difference calculated from thedate 45 days after delivery of the litigation proceeds certificate at aninterest rate equal to the average rate actually earned on the rightscertificate payment amount determined by IRI Holdings, Inc. and investedin specified short-term instruments. All costs and expenses billed by theaccounting firm in connection with the performance of its duties described inthis prospectus will be paid by IRI Holdings, Inc.; *provided,however,* that if IRI Holdings, Inc.’s determination of therights certificate payment amount is:

 

• greaterthan or equal to 95% of the rights certificate payment amount determined by theaccounting firm, then 100% of the costs and expenses billed by the accountingfirm will be deducted from the rights certificate payment amount;

• greaterthan or equal to 85% of the rights certificate payment amount determined by theaccounting firm, but less than 95% of the rights certificate payment amountdetermined by the accounting firm, then

 

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50% of such costs and expenses will be deducted from the rightscertificate payment amount; or

• less than85% of the rights certificate payment amount determined by the independentaccounting firm, then IRI Holdings, Inc. will not be reimbursed for anyportion of the independent accounting firm costs and expenses.

 

In connection with theapproval of any settlement decision, a majority of the rights agents (notincluding the Independent Rights Agent) (as defined in “Management of theLitigation” below) will determine the matters to be set forth in a litigationproceeds certificate, including the fair market value of any non-cash proceedsto be received in connection with that settlement decision. As promptly aspracticable, but in no event later than 30 days after the settlement, therights agents will deliver to IRI Holdings, Inc. a litigation proceedscertificate, which will be binding on IRI Holdings, Inc. and the trust,absent mathematical errors.

 

If any rights certificatepayment amount is determined to be payable in accordance with a litigationproceeds certificate, IRI Holdings, Inc. will pay that amount to the trustwithin two business days after such determination is final. Except inlimited cases specified in the contingent value rights agreement, no interestshall accrue on any amounts payable by IRI Holdings, Inc. to the trust.

 

PAYMENT CALCULATION. Subjectto the required adjustment for the last rights certificate payment date asrequired by the contingent value rights agreement, the calculation of therights certificate payment amount (as described below) for any date on whichthe rights certificate payment amount is made (a “rights certificate paymentdate”) after the first rights certificate payment date, will be made on acumulative basis to reflect:

 

• thereceipt of all gross litigation proceeds (as defined below);

• the priorpayment of any rights certificate payment amounts;

• assumedtax liabilities (computed by multiplying the amount at issue by an assumed taxrate of 34%) with respect to those litigation proceeds from the date of thecontingent value rights agreement to the date of determination of each suchsubsequent rights certificate payment amount; and

• anypayment of fees for services provided by outside counsel in connection withprosecuting the antitrust litigation that are contingent on the success of thelitigation (“contingency-based fees”) from the date of the agreement to thedate of determination of each such subsequent rights certificate paymentamount.

 

However, in no event willthe trust or the certificate holders be required to refund to IRI Holdings, Inc.or any of its affiliates any portion of any rights certificate payment amountpreviously paid to the trust.

 

The trust is entitled toreceive the rights certificate payment amount, which is calculated using thefollowing methodology:

 

• First, bycalculating the “base preliminary rights certificate payment amount,” whichequals (x) the “base rights certificate percentage” (generally 68%, andadjusted as described below) *times* thelesser of $200 million or the amount of gross litigation proceeds (asdefined below) actually received by Information Resources and its subsidiariesor their affiliates through the date of the litigation proceeds certificateapplicable to such rights certificate payment date *minus*(y) the base rights certificate percentage *times*the assumed tax liability with respect the lesser of $200 million or allgross litigation proceeds actually received through the date of the litigationproceeds certificate applicable to that rights certificate payment date *minus* (z) (I) the base rights certificate percentage *times* (II) one *minus* theassumed tax rate *times* (III) the amount ofcontingency-based fees that are calculated on the basis of the portion of grosslitigation proceeds that are less than or equal to $200 million. However,the base preliminary rights certificate payment amount for the last rightscertificate payment date will be increased by the amount by which the claimsexpenses (as defined below) are less than $10 million, and will be furtheradjusted in respect of credit support costs as described below under “—Fundingof Claims Expenses.”

• Second,by calculating the “excess preliminary rights certificate payment amount”,which equals (x) the product of the “excess rights certificate percentage”(generally 75%, and adjusted as described below) *times*the amount by which the gross litigation proceeds actually received byInformation

 

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Resources and its subsidiaries or their affiliates through the date ofthe litigation proceeds certificate applicable to such rights certificatepayment date exceeds $200 million, *minus* (y) theexcess rights certificate percentage *times* theassumed tax liability with respect to the gross litigation proceeds in excessof $200 million actually received through the date of the litigationproceeds certificate, *minus*(z) (I) the excess rights certificate percentage *times*(II) one *minus* the assumed tax rate *times* (III) the amount of contingency-based fees thatare calculated on the basis of the gross litigation proceeds that are in excessof $200 million.

• Third, bycalculating the “rights certificate payment amount,” which equals the sum of(x) the base preliminary rights certificate payment amount *plus* (y) the excess preliminary rights certificatepayment amount;*provided*that the rightscertificate payment amount will be adjusted as described in the next paragraph.

 

The rights certificatepayment amount for any rights certificate payment date will be reduced by theproduct of (A) one *minus* theassumed tax rate *times* (B) the sum of thefollowing expenses (collectively, the “deductible expenses”):

 

• theaggregate amount of expenses as of the rights certificate payment date (and notpreviously included in the computation of a rights certificate payment amount)that Information Resources has incurred (directly or by reimbursement) topermit the trust to comply with securities laws or the rules of the OTCBulletin Board (as described below under “—Expenses of the Trust”) or inconnection with the registration of the rights certificates under theSecurities Act; plus

• theaggregate amount of expenses as of the rights certificate payment date (and notpreviously included in the computation of a rights certificate payment amount)incurred pursuant to Information Resources’ obligation to obtain liabilityinsurance for the benefit of the rights agents and to cover the trust’sindemnification obligations, or in order to obtain and maintain directors’ andofficers’ insurance for IRI Holdings, Inc., Information Resources andtheir subsidiaries, but in each case only the aggregate amount in excess of theaggregate amount that would have been paid if the rights certificates werenon-transferable contractual rights rather than publicly traded, registeredsecurities (which amounts shall be determined by decision of a majority of therights agents or, if there are fewer than five rights agents, by unanimousapproval of the rights agents).

 

If the amount by which therights certificate payment amount is to be so reduced exceeds the rightscertificate payment amount otherwise payable on the relevant rights certificatepayment date, then no payment will be made to the trust for that rightscertificate payment date and the amount of the excess reduction will be carriedover to reduce future rights certificate payment amounts (but not below zero)until the entire reduction amount has been applied.

 

For purposes of theforegoing, the term “gross litigation proceeds” means the sum of (x) anyand all cash proceeds recovered or received by Information Resources, itssubsidiaries or their affiliates as a result of the litigation (includingcompensation, damages, penalties and other payments), *plus*(y) the fair market value of any and all non-cash proceeds recovered orreceived by Information Resources, its subsidiaries or their affiliates as aresult of the litigation (including agreements, commitments, undertakings andother benefits and protections). The term “litigation proceeds” means grosslitigation proceeds less any contingency-based fees. Any non-cash proceeds thatprovide Information Resources, its subsidiaries and their affiliates with nosubstantial benefits or protections other than those to which they are entitledunder applicable law are deemed to have a fair market value of zero under theagreement.

 

PAYMENT PROCEDURES TOHOLDERS OF RIGHTS CERTIFICATES.****The trust willmake payments from time to time to the holders of rights certificates upon thereceipt of rights certificate payment amounts from IRI Holdings, Inc.pursuant to the contingent value rights agreement. The payment dates will bedetermined by the litigation trustees of the trust and, with respect to anyreceipt of rights certificate payment amounts, will be no more than60 days following the receipt of those amounts. On each payment date, theinstitutional trustee of the trust will transfer the aggregate rightscertificate payment amount to the payment agent designated pursuant to thedeclaration of trust, and the payment agent will promptly make payments to theholders.

 

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**Expenses; Escrow Fund**

 

FUNDING OF CLAIMS EXPENSES.****Claims expenses (as defined below) are generally incurredand paid by Information Resources and are then reimbursed to InformationResources out of the escrow account referred to in the next paragraph. (See Part I,Item 2 below — Summary Financial Information.) As used herein, the term “claimsexpenses” means the sum of all direct expenses incurred after the date of themerger agreement by IRI Holdings, Inc., Information Resources, InformationResources’ subsidiaries, and their affiliates to prosecute the antitrustlitigation, (i) generally including any amounts paid to or on behalf ofthe rights agents but (ii) excluding (A) contingency-based fees, (B) anypayment of the independent accounting firm costs and expenses, (C) anyfees, expenses or costs associated with the trust and (D) any fees,expenses or costs associated with registering the rights certificates under theSecurities Act or any fees, expenses or costs associated with complying withthe Securities Act, the Securities Exchange Act of 1934 and other securitieslaws. Claims expenses also include (a) certain amounts payable to IRIHoldings, Inc. in the event that the rights agents direct employees of IRIHoldings, Inc., Information Resources, Information Resources’subsidiaries, or their affiliates to perform certain tasks in connection withthe antitrust litigation and (b) specified costs incurred by IRI Holdings, Inc.in obtaining credit support for its obligation to fund claims expenses. As of June 30,2005, no amounts were owed to IRI Holdings, Inc. for employee timereferred to in subparagraph (a) above or for credit support costs referredto in subparagraph (b) above.

 

ESCROW FUND. Pursuant to thecontingent value rights agreement, on December 12, 2003 IRI Holdings, Inc.placed the cash amount of $10 million, plus interest in the amount of$45,548, in an escrow account held by LaSalle Bank National Association asescrow agent, free of any liens or encumbrances of any kind (except aspermitted in the contingent value rights agreement), to support the prosecutionof the antitrust litigation and the payment of claims expenses. The escrowaccount is in the name of Information Resources but is restricted in use tofunding claims expenses for the antitrust litigation. As of June 30, 2005,the escrow account balance was $3,194,810.

 

As of July 25, 2005, Information Resources has been reimbursed outof the escrow fund for certain claims expenses it has paid, and certain thirdparty providers have been paid directly out of the escrow fund for other claimsexpenses, in the total amount of $6,915,245. Information Resources has paid an additional amount of $26,139 forclaims expenses for which Information Resources will be entitled toreimbursement out of the escrow fund upon presentation of a claims notice tothe escrow agent. Information Resources has also received invoices for claimsexpenses in the amount of $88,302 that remain unpaid as of July 25, 2005.After disbursement of the foregoing amounts out of the escrow fund, the balanceremaining in the escrow fund, including all interest earned on the balance asof June 30, 2005, will be $3,080,367.

 

PROCESS FOR RAISING ADDITIONAL FUNDS. While the rights agents are notcurrently considering raising additional funds, the declaration of trust willpermit the litigation trustees of the trust, upon the instruction of the CVRRights Agents, to raise funds to pay expenses of the antitrust litigation inexcess of $10 million by either causing the trust to incur indebtednessthat represents debt of the trust (and not an ownership interest) for UnitedStates federal income tax purposes or causing the trust to issue additionalrights certificates. Any such indebtedness will likely represent a prior claimon the assets of the trust, including any rights certificate payment amountsreceived pursuant to the contingent value rights agreement, and may reduce theaggregate amounts available for distribution to rights certificate holders. Anyissuance of additional rights certificates will have a dilutive effect onrights certificate holders, reducing the percentage of the total rightscertificate payment amount that holders receive with respect to each rightscertificate. As of the date hereof, the litigation trustees have taken noactions to raise additional funds. There can be no assurance that the trustwill be able to raise additional funds or, if the trust is able to raise thosefunds, that the terms of that financing will be reasonable. If the trust isunsuccessful in raising additional funds, and if the failure to prosecute theantitrust litigation results in the dismissal of Information Resources’ claims,there will be a possibility of no payment on the rights certificates.

 

CONTINGENCY FEE ARRANGEMENTS. On September 17, 2002, InformationResources entered into a partial contingency fee arrangement with Freeborn &Peters LLP, one of the law firms representing it in the antitrust litigation.In May of 2004, Information Resources also entered into full contingencyfee arrangements with Hagens Berman Sobol Shapiro LLP (formerly Hagens BermanLLP), the lead trial counsel in the antitrust litigation, and Boies, Schiller &Flexner LLP, the former lead trial counsel in the antitrust litigation.

 

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Under the partial contingency fee arrangement with Freeborn &Peters, Information Resources is obligated to pay all legal fees InformationResources incurs for services provided by Freeborn & Peters below aspecific monthly cap, together with all expenses incurred by Freeborn &Peters in connection with the antitrust litigation. Additionally, InformationResources has agreed that, if it settles the case after the trial commences orobtains a verdict in its favor, it will pay Freeborn & Peters anamount equal to the greater of (i) 5% of the value of what InformationResources recovers from the defendants as a result of a judgment renderedagainst or a settlement with them, or (ii) the difference between theactual fees paid by Information Resources to Freeborn & Peters inconnection with the litigation and the fees that Information Resources wouldhave incurred had it continued paying Freeborn & Peters for servicesrendered for the period January 1, 2002 through the trial of thelitigation at that firm’s standard rates. If the litigation is settled anddismissed before the beginning of a trial on its merits, Information Resourceswill instead pay Freeborn & Peters $2.5 million as a contingencyfee. Separate from the contingency fee arrangement, Information Resources hasalso agreed to reimburse Freeborn & Peters for all discounts receivedby Information Resources on legal fees incurred in connection with thelitigation and related matters through (i) the period ending December 31,2001 if Information Resources settles or obtains a verdict in its favor afterthe trial commences, or (ii) the date of settlement if a settlement occursbefore the trial commences.

 

Under the full contingency fee arrangement with Hagens Berman, HagensBerman has agreed to represent Information Resources through the trial in thelitigation, as well as through any appeals or any retrial, in consideration fora contingency fee to be calculated as follows: If the litigation is settledbefore a jury is sworn in, Information Resources will pay Hagens Berman acontingency fee equal to the sum of 6% of the first $100 million of anyrecovery, 5% of the second $100 million of any recovery, 4% of the third $100million of any recovery and 3% of the amount of any recovery in excess of $300million. If Information Resources settles the case after a jury is sworn in orobtains a verdict in its favor, Information Resources will instead pay HagensBerman a contingency fee equal to 8% of any recovery. As part of thiscontingency fee arrangement, Information Resources is responsible for payingall expenses incurred by Hagens Berman and Information Resources to prosecutethe litigation in accordance with a mutually agreed upon budget. Any expensesincurred in excess of the budget will be advanced by Hagens Berman, to bereimbursed to it out of any balance in the escrow fund referred to above onmutually agreed upon terms. Substantially all costs (excluding legal fees forcounsel representing Information Resources in the litigation) paid directly orreimbursed by Information Resources or out of the escrow fund since theinception of the case will be deducted from any recovery before calculatingHagens Berman’s contingency fee. No contingency fee shall be paid to HagensBerman on the award by a court of fees, costs or interest.

 

Under the contingency fee arrangement with Boies, Schiller &Flexner LLP, Boies, Schiller & Flexner was paid $250,000 in June 2004as satisfaction in full of any expenses incurred by it on behalf of InformationResources during its representation of Information Resources in the antitrustlitigation. Further, as full and final satisfaction of any and all otheramounts that Boies, Schiller & Flexner has claimed or may claim aredue to it in consideration for its representation of Information Resources inthe antitrust litigation, Boies, Schiller & Flexner will be entitledto a contingency fee of $3 million out of any recovery received by InformationResources in the antitrust litigation. If the contingency fee is not paid toBoies, Schiller & Flexner on or before July 15, 2005, this amountwill begin to accrue interest, in an amount not to exceed $250,000, on July 16,2005 at the rate of one-half of one percent per month. Boies, Schiller &Flexner has agreed to look solely to any recovery from the antitrust litigationfor the payment of the $3 million contingency fee and any interest that mayaccrue thereon.

 

The additional contingency fee arrangements entered into with HagensBerman and Boies, Schiller & Flexner in May of 2004 will reducethe percentage of the total recovery from the antitrust litigation that isavailable to rights certificate holders with respect to each rights certificateby the amount of such contingency-based fees; however, these additionalcontingency fee arrangements may also increase the likelihood of InformationResources obtaining a higher overall recovery in the litigation, therebyincreasing the aggregate amount available for distribution to rightscertificate holders. (See “Risk Factors—****InformationResources has entered into additional contingency fee arrangements with counselwhich will reduce the percentage of the total recovery from the antitrustlitigation that is available to rights certificate holders.”)

 

EXPENSES OF THE TRUST. Pursuant to the contingent value rightsagreement, Information Resources will generally be responsible for the expensesof the trust, subject to Information Resources’ prior approval of those

 

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expenses. Information Resources will also be responsible for allexpenses relating to the indemnification obligations of the trust described inthe Prospectus or compliance with securities laws and the rules of the OTCBulletin Board. Information Resources will not be responsible for the expensesof the trust relating to indebtedness for borrowed money and as discussed abovewill be reimbursed for “claims expenses” paid by it. Any expenses not imposedon Information Resources as described above will be general obligations of thetrust, payable out of the trust’s assets (including out of any rightscertificate payment amounts received pursuant to the contingent value rightsagreement). Information Resources will be entitled to deduct from the amountspayable to the trust under the contingent value rights agreement those expensesof the trust described as deductible expenses in “—Payment Calculation” above.

 

**The Litigation**

 

The following descriptionof the antitrust litigation has been obtained from publicly available documentsfiled with the Securities and Exchange Commission by Information Resources, asupdated from time to time in publicly available documents filed with theSecurities and Exchange Commission by the trust. It does not purport to be afull or complete description of the legal or factual issues presented, thecourt opinions rendered or the relevant law.

 

GENERAL. On July 27, 1996, Information Resources filed anantitrust lawsuit against The Dun & Bradstreet Corp., A.C. NielsenCompany and IMS International, Inc. in the United States District Courtfor the Southern District of New York entitled Information Resources, Inc.v. The Dun & Bradstreet Corp., et al. No. 96 CIV. 5716. In thelawsuit, Information Resources alleges that the defendants violatedSections 1 and 2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, andthe common law by engaging in a series of unlawful practices through whichInformation Resources claims that defendants attempted to regain monopoly powerin the U.S. market for retail tracking services and exclude competition from 30markets outside the U.S., where Nielsen dominated. Through the antitrustlitigation, Information Resources seeks to enjoin those practices and torecover damages in excess of $650 million, before trebling. InformationResources demanded a trial by jury, and the case has been assigned to theHonorable Louis L. Stanton. It is Information Resources’ position that itcontinues to suffer damages to this day as a result of the defendants’allegedly unlawful practices, which it believes were aimed at underminingcompetition by financially crippling Information Resources.

 

DEFENDANTS’ PRACTICES. Information Resources asserts that, for over60 years, Nielsen had dominated the markets for retail tracking services,both within and outside the U.S., through its manual, audit-based services. In1986, Information Resources introduced its retail tracking service known as “InfoScan,”the world’s first national retail tracking service based on scanner data.Information Resources alleges that, due to the success of the InfoScan service,by 1992 Information Resources had gained a significant share of the U.S.market. At the same time, Information Resources began to undertake efforts toexpand and export its services to new geographic markets in Western Europe andCanada, where, Information Resources asserts, Nielsen continued to exercisemonopoly power.

 

Information Resources claims that, faced with a threat to Nielsen’sforeign monopolies and the loss of market share in the U.S., defendantsdeveloped and implemented a plan to undermine Information Resources’ ability tocompete both within the U.S. and abroad. To accomplish this objective,Information Resources alleges that the defendants in the antitrust litigationengaged in the following coordinated anticompetitive practices, among others:

 

•    unlawfully tying/bundling services inmarkets in which defendants had monopoly power with services in markets inwhich Nielsen competed with Information Resources;

•    entering into exclusionary contracts withretailers in several countries in order to deny Information Resources’ accessto the sales data necessary to provide retail tracking services or toartificially raise the cost of that data;

•    predatory pricing;

•    acquiring foreign market competitors withthe intent of impeding Information Resources’ efforts at geographic expansion;

•    tortiously interfering with InformationResources’ contracts and relationships with clients, joint

 

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venture partners and other market research companies;

•    disparaging Information Resources tofinancial analysts and clients; and

•    denying Information Resources access to thecapital markets necessary for it to compete.

 

THE GOVERNMENT INVESTIGATIONS. When the defendants in the antitrustlitigation refused to end these practices, Information Resources alertedantitrust regulatory authorities in Canada, the United States and Europe.First, Information Resources complained to the Canadian Director ofInvestigation and Research concerning exclusive data contracts with retailersand long-term contracts with manufacturers that Nielsen had executed in Canada.Information Resources claimed that those contracts prevented InformationResources’ entry into the Canadian market. The Canadian Director ofInvestigation and Research conducted an investigation and thereafter filed anapplication on April 5, 1994 against Nielsen’s practices before theCanadian Competition Tribunal. On August 30, 1995, the CanadianCompetition Tribunal issued an order concluding that Nielsen, the sole supplierof retail tracking services in Canada, had unlawfully excluded InformationResources from the market. The Canadian Competition Tribunal ordered thatNielsen could not enforce any of the provisions of its contracts with retailersor manufacturers that the tribunal had concluded were anticompetitive.

 

Information Resources also complained to the United States Departmentof Justice-Antitrust Division in July 1994 and to the EuropeanCommission-Directorate General IV in September 1994, concerning thedefendants’ bundling practices with multinational manufacturers and allegedlyexclusionary data contracts with retailers in Europe. The Department of Justiceand the European Commission entered into a cooperation agreement, with theEuropean Commission ultimately taking primary responsibility for theinvestigation.

 

On May 7, 1996, following an 18-month investigation, the EuropeanCommission initiated formal proceedings against Nielsen, the dominant providerof retail tracking services in Europe, and adopted a statement of objections.The European Commission found that Nielsen had engaged in abusive practices toexclude Information Resources from European markets for retail trackingservices. On November 28, 1996, Nielsen entered into a formal undertakingwith the European Commission in which it agreed to abandon all of the abusivepractices found by the Commission. Because Nielsen entered into the undertaking,the Department of Justice closed its investigation.

 

U.S. LEGAL PROCEEDINGS. On July 27, 1996, Information Resourcesfiled its complaint, which asserts the following claims: Sherman Act Section 1Violation-Per Se Tying (Count I); Sherman Act Section 1 Violation-UnreasonableRestraints of Trade (Count II); Sherman Act Section 2Violation-Monopolization of the Export Markets (Count III); Sherman Act Section 2Violation-Attempt to Monopolize the Export Markets (Count IV); Sherman Act Section 2Violation-Attempt to Monopolize the United States Market (Count V);Sherman Act Section 2 Violation-Monopoly Leveraging (Count VI);Tortious Interference with Contract (Count VII); Tortious Interferencewith Prospective Business Relationship (Count VIII).

 

On December 3, 2004, the U.S. District Court presiding over thelitigation granted defendants’ motion inlimine, holding thatInformation Resources was barred from arguing that Nielsen’s pricing practicesor discounts, including its bundling practices, were illegal oranti-competitive unless it could prove that they involved prices belowshort-run average variable costs, calculated without the inclusion of Nielsen’sfixed operations costs. On January 27, 2005, the court issued a stipulatedorder dismissing all of Information Resources’ remaining claims with prejudiceand on the merits for the purpose of allowing Information Resources to take animmediate appeal. At this time, the court also entered a final judgment againstInformation Resources. Information Resources stipulated to the court’s orderand to a final judgment being entered against it because it could not meet thestandard that the court set forth in its December 3, 2004 inlimineorder (as summarized in the first sentence of this paragraph above). While InformationResources believes that this standard is erroneous, it determined that it couldnot prove its remaining claims without the critical evidence of Nielsen’sbundled contracts that was excluded by the inlimine ruling.

 

Effective February 1, 2005, Information Resources filed a Noticeof Appeal with the United States Court of Appeals for the Second Circuitappealing the final judgment entered against it on January 27, 2005, aswell as the earlier rulings pursuant to which the court denied Information Resourcesand/or its subsidiaries the right to sue under the Sherman Act for damagessuffered in those European markets where Information Resources sold its

 

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InfoScan services through its subsidiaries. On April 15, 2005,Information Resources, as appellant, filed its brief in the Second CircuitCourt of Appeals.  Appellees filed theirresponsive brief on May 16, 2005. Information Resources then filed its reply brief on June 7, 2005.All briefs filed in this case with the Second Circuit Court of Appeals are amatter of public record and should be available for viewing in the clerk’soffice of the Second Circuit Court of Appeals. Hagens Berman, Information Resources’ lead trial counsel in this case,has also posted Information Resources’ April 15, 2005 appellate brief,appellees’ May 16, 2005 responsive brief and Information Resources’ June 7,2005 reply brief on its website at www.hbsslaw.com. All other materials filedwith the Second Circuit Court of Appeals in this case, if publicly available,should be obtained directly from the clerk’s office of the Second Circuit Courtof Appeals.

 

The Court is currently in the process of scheduling a date for oralargument of the appeal, which is expected to occur sometime during the 2005calendar year. (See “Risk Factors—****There can beno assurance that Information Resources will prevail on all or any part of itsappeal before the Second Circuit Court of Appeals or any subsequent appeals, ifnecessary.”) The contingency fee arrangement in place with Hagens Bermanspecifically covers all appellate activity related to the litigation. In lightof this, and based on current assumptions about the appeals process before theSecond Circuit Court of Appeals, the rights agents do not expect the cost ofthe current appeals process in the Second Circuit to be significant. (See “RiskFactors—****There can be no assurance that thetrust will have adequate funds to prosecute the litigation.”)

 

During the course of the proceedings, the court has made the followingnon-discovery related rulings, among others, and Information Resources anddefendants have recently taken the following key actions:

 

•     On May 6, 1997, thecourt denied defendants’ motion to dismiss the complaint, with the exception ofInformation Resources’ claim for attempted monopolization of the U.S. market.With leave from the court, Information Resources filed an amended complaint on July 7,1997, re-pleading this claim. On December 1, 1997, the court denieddefendants’ motion to dismiss Information Resources’ amended claim forattempted monopolization of the U.S. market.

•      On December 7, 1998, the court issueda ruling that barred defendants from denying certain findings and conclusionsof the Canadian Competition Tribunal. The court also ruled that the EuropeanCommission’s Statement of Objections set forth factual findings resulting froman investigation made pursuant to authority granted by law and, as a result,would be received in evidence pursuant to Federal Rule of Evidence803(8)(C).

•      On July 12, 2000, the court granteddefendants’ motion for partial summary judgment and dismissed InformationResources’ claims of injury suffered from defendants’ activities in foreignmarkets where Information Resources operates through subsidiaries or companiesowned by joint ventures, or relationships with local companies, for lack ofstanding.

•      On February 6, 2001, the court deniedInformation Resources’ motion to substitute its subsidiaries as plaintiffs forthose claims dismissed by the court’s order of July 12, 2000, on theground that the court lacked subject matter jurisdiction over the subsidiaries’claims. The court also clarified that its order of July 12, 2000prohibited Information Resources from suing to recover damages for anyweakening of its competitive position in the United States because of reducedrevenue from its foreign subsidiaries. The court also clarified that its orderof July 12, 2000 did not dismiss Information Resources’ claims in marketsthat Information Resources was prepared to or attempted to enter, but fromwhich it claimed it was excluded. Information Resources alleged that it wascompletely excluded and never operated a service either directly or through asubsidiary in 22 of the 30 foreign markets identified by Information Resourcesin its Amended Complaint.

•      On April 28, 2003, the court ruledthat Information Resources had standing to assert its claims for injury in theU.S. as a result of defendants’ foreign conduct that allegedly drainedInformation Resources of U.S. resources necessary to compete in the domesticmarket, as set forth in Information Resources’ letters to the court dated November 15and December 19, 2002. The court also denied defendants’ motion forsummary judgment seeking to dismiss Information Resources’ claims of injury inthe 22 foreign markets not covered by its previous orders of July 12, 2000and February 6, 2001.

•      On May 21, 2003, the court entered anorder setting a trial date of September 20, 2004.

•      On January 15, 2004, the court,pursuant to defendants’ request, vacated the discovery cut off and

 

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trial date to allow defendants additional time for discovery onInformation Resources’ claims of injury permitted by the court’s April 28,2003 order with respect to defendants’ foreign conduct that allegedly drainedInformation Resources of U.S. resources necessary to compete in the domesticmarket.

•      On February 27, 2004, InformationResources filed its expert report prepared by Professor Franklin Fisher, who,among other things, opined both on defendants’ liability and InformationResources’ damages. In general, Professor Fisher concluded that defendantsengaged in a series of anticompetitive practices, both in the U.S. and abroad,aimed at monopolizing the U.S. market and excluding Information Resources fromnon-U.S. markets. Professor Fisher opined that a dangerous probability existedwhen defendants undertook these practices that they would have monopolized theU.S. market had government authorities not intervened.

•      On February 27, 2004, InformationResources also notified the court that, in order to expedite the prosecution ofthe antitrust litigation, it had elected not to pursue as separate claims fordamages any of the following: 1) *per se* tyingclaim (Count I); 2) monopolization and attempted monopolization of certainexport markets, specifically Australia, Austria, Belgium, Brazil, Denmark,Finland, Indonesia, Ireland, Hong Kong, Korea, Luxembourg, Malaysia, NewZealand, Norway, Philippines, Portugal, Singapore, Taiwan, Thailand andSwitzerland (Counts III and IV); 3) monopoly leveraging (Count VI); or 4)tortious interference with contract and prospective business relationship(Counts VII and VIII). While Information Resources is not prosecuting these asseparate claims for damages, Information Resources believes that each remainsrelevant, as an evidentiary matter, to Information Resources’ remaining claims.

•      On April 7, 2004, the court issued aScheduling Order setting a trial date of April 18, 2005 and a discoverycut off date of October 31, 2004.

•      On July 23, 2004, the courtofficially admitted the law firm of Hagens Berman Sobol Shapiro LLP (formerlyHagens Berman LLP) in place of the law firm of Boies, Schiller & FlexnerLLP to serve as co-counsel representing Information Resources in the antitrustlitigation.

•      On September 3, 2004, defendantsfiled two new motions: (1) a Motion for Reconsideration of the court’s December 7,1998 ruling that the European Commission’s Statement of Objections againstdefendants would be received into evidence at trial, and (2) a Motion inLimine seeking to exclude from trial evidence of certain of defendants’retail tracking contracts.

•      As of October 31, 2004, factdiscovery in the case was completed.

•      On December 3, 2004, the courtgranted defendants’ motion in limine, holding that InformationResources was barred from arguing that Nielsen’s pricing practices ordiscounts, including its bundling practices, were illegal or anti-competitiveunless it could prove that they involved prices below short-run averagevariable costs, calculated without the inclusion of Nielsen’s fixed operationscosts.

•      On January 27, 2005, the court issueda stipulated order dismissing all of Information Resources’ remaining claimswith prejudice and on the merits for the purpose of allowing InformationResources to take an immediate appeal. Also on January 27, 2005, the courtentered a final judgment against Information Resources, pursuant to thestipulated order and Rule 54 of the Federal Rules of Civil Procedure,dismissing Information Resources’ Amended Complaint with prejudice and on themerits so that Information Resources could take an immediate appeal.

•      Effective February 1, 2005,Information Resources filed a Notice of Appeal from the final judgment, whichincludes, among other things, the January 27, 2005 stipulated order ofdismissal, as well as the court’s orders dated July 12, 2000 and February 6,2001, pursuant to which the court denied Information Resources and/or itssubsidiaries the right to sue under the Sherman Act for damages suffered inthose European markets where Information Resources sold its InfoScan servicesthrough its subsidiaries.

•      On April 15, 2005, InformationResources filed its brief in the Second Circuit Court of Appeals.

•      On May 16, 2005, appellees filedtheir responsive brief in the Second Circuit Court of Appeals.

•      On June 7, 2005, InformationResources filed its reply brief in the Second Circuit Court of Appeals.

 

It is Information Resources’ view that the court’s December 3,2004 ruling improperly extended and expanded the bright line test used foridentifying predatory pricing to a different practice — bundling — resulting inthe dismissal of Information Resources’ remaining claims for damages. It isalso Information Resources’ view that the court also failed to take account ofthe synergistic effects of defendants’ several anti-competitive practices. Withrespect to Information Resources’ claims for damages in the European markets,it is Information Resources’

 

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position that the court improperly granted defendants’ motion forsummary judgment denying Information Resources standing. Information Resourcesbelieves that the court then compounded this error by denying InformationResources’ request to amend its complaint to add its subsidiaries asplaintiffs.

 

If Information Resources succeeds in its appeal in its entirety suchthat the final judgment, including the January 27, 2005 stipulated order,the July 12, 2000 order and the February 6, 2001 order, are reversed,Information Resources will likely seek an immediate trial of all claims thatwere dismissed by the January 27, 2005 order, as well as those claims thatInformation Resources and/or its subsidiaries were prevented from pursuing bythe July 12, 2000 and the February 6, 2001 orders. In this event,Information Resources’ damage claim will increase by an amount not yetdetermined, but in excess of those damages calculated in the expert report ofProfessor Franklin Fisher initially filed on February 27, 2004, for theadditional losses suffered in those European markets where InformationResources sold its services through subsidiaries. If, instead, the finaljudgment is affirmed with respect to the district court’s July 12, 2000and February 6, 2001 rulings, but reversed with respect to the standardset out by the district court in its December 3, 2004 ruling, thenInformation Resources will likely seek an immediate trial of the same claimsfor which it was seeking redress immediately prior to the district court’s December 3,2004 ruling, claiming the same damages as those calculated in the February 27,2004 expert report of Professor Franklin Fisher. Alternatively, if the finaljudgment is affirmed with respect to the standard set out by the district courtin its December 3, 2004 ruling, but reversed with respect to the districtcourt’s July 12, 2000 and February 6, 2001 rulings, then InformationResources will consider its possible courses of action, including, but notlimited to, further appeals as set forth in the following paragraph or animmediate trial of all claims for damages suffered by Information Resourcesand/or its subsidiaries in European markets where Information Resources soldits services through its subsidiaries, subject to the district court’s December 3,2004 ruling.  If Information Resourcessucceeds in its appeal in part or in its entirety, defendants will have theright to seek a rehearing *en banc* from theSecond Circuit.  If that is unsuccessful,defendants would be entitled to seek review by the Supreme Court of the UnitedStates.

 

If Information Resources does not prevail on any part of its appealbefore the Second Circuit Court of Appeals, Information Resources’ immediaterecourse will likely be to seek a rehearing *en banc* fromthe Second Circuit. If that is unsuccessful, Information Resources would beentitled to seek review by the Supreme Court of the United States. If suchreview is denied, the case will be concluded. If Information Resources decidesnot to seek review by the Supreme Court or the Supreme Court denies InformationResources’ right to such a review, or having obtained the right to such areview, Information Resources does not obtain a favorable ruling from theSupreme Court, no award of monetary damages will be made to InformationResources and therefore, no monetary payment will be possible from the trust tothe holders of rights certificates except to the extent any funds remain in theescrow fund at the conclusion of the litigation, in which case such funds shallbe disbursed to the holders of rights certificates in accordance with the termsof the contingent value rights agreement. In the event that InformationResources does seek and obtain Supreme Court review and obtains a ruling in itsfavor, the case will likely be remanded to the United States Court of Appealsfor the Second Circuit for proceedings consistent with the Supreme Court’sruling.

 

There can be no assurance that Information Resources will prevail onall or any part of its appeal before the Second Circuit Court of Appeals or anyfurther appeals should these become necessary, nor can there be any assurancethat Information Resources will succeed in obtaining any recovery or be able tomake any payment from the trust to the holders of rights certificates. (See “RiskFactors—****There can be no assurance thatInformation Resources will prevail on all or any part of its appeal before theSecond Circuit Court of Appeals or any subsequent appeals, if necessary.”) Atthis time, none of the trust, IRI Holdings, Inc., the rights agents, thelitigation trustees, or any of their respective affiliates, is able to predictwhich, if any, of the possible outcomes set forth above are likely to occur,nor can any of the foregoing predict with any certainty what InformationResources’ response will be should any of the possible outcomes set forth aboveactually occur.

 

DAMAGES. In its original complaint, filed in 1996, InformationResources sought damages in excess of $350 million before trebling. As setforth above, on February 27, 2004, Information Resources filed the expertreport of Professor Fisher. In that report, Professor Fisher opined thatInformation Resources has suffered damages of between $545.4 million and $615.5million (prior to trebling) in the U.S. market, as a result of defendants’practices that Professor Fisher has concluded are anticompetitive and throughwhich Professor Fisher concludes defendants sought to monopolize the U.S.market. He has also opined that Information Resources suffered

 

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damages of $21.0 million in Canada and $15.2 million in Mexico, as aresult of practices that Professor Fisher has concluded were anticompetitiveand excluded Information Resources from these markets. If Information Resourcessucceeds on its appeal before the Second Circuit Court of Appeals in itsentirety, such that the final judgment, including the January 27, 2005stipulated order, the July 12, 2000 order and the February 6, 2001order, are reversed, Information Resources will likely seek an immediate trialof all claims that were dismissed by the January 27, 2005 order, as wellas those claims that Information Resources and/or its subsidiaries wereprevented from pursuing by the July 12, 2000 and the February 6, 2001orders. In this event, Information Resources’ damage claim will increase by anamount not yet determined, but in excess of those damages calculated in theexpert report of Professor Franklin Fisher initially filed on February 27,2004, for the additional losses suffered in those European markets whereInformation Resources sold its services through subsidiaries.

 

**None of the trust, IRI Holdings, Inc., Information Resources, orany of their respective affiliates, makes any representations as to the amountof any potential recovery from the antitrust litigation or when, if ever, anyrecovery may be obtained.**

 

COUNSEL TO INFORMATIONRESOURCES. Information Resources is currently represented in the antitrustlitigation by the following law firms: Freeborn & Peters LLP; HagensBerman Sobol Shapiro LLP (formerly Hagens Berman LLP); and Fried, Frank,Harris, Schriver & Jacobson LLP.

 

**Managementof the Litigation**

 

GENERAL. Under the termsof the contingent value rights agreement, the antitrust litigation is to bedirected on behalf of Information Resources and the rights certificates holdersby a body of five rights agents: two CVR Rights Agents, two Parent RightsAgents and one Independent Rights Agent. Under the contingentvalue rights agreement, the CVR Rights Agents are responsible for overseeingthe day-to-day workings of the antitrust litigation. However, the approval of amajority of the rights agents is required for certain strategic decisionsrelating to the antitrust litigation. Further, a majority of the rights agents(other than the Independent Rights Agent) must approve any settlement of thelitigation.

 

The current CVR RightsAgents are Joseph P. Durrett, former Chief Executive Officer and Chairman ofthe Board of Directors of Information Resources, and Monica M. Weed, formerGeneral Counsel of Information Resources. The current Parent Rights Agents areWilliam Chisholm, Executive Vice President and a member of the Board of Directorsof IRI Holdings, Inc., and Michael Duffey, current Chief Financial Officerof Information Resources. The current Independent Rights Agent is TravisRhodes, investment analyst at Abrams Capital LLC.  On July 26, 2005, Mr. Rhodesadvised the other Rights Agents that he intends to resign his position asIndependent Rights Agent effective as of August 15, 2005 in order todevote greater attention to his primary responsibilities at Abrams Capital. Mr. Rhodes’decision to resign was not a result of any disagreement with the Trust, theLitigation Trustees or the other Rights Agents, nor was it the result of anymatter relating to the antitrust litigation or the Trust’s operations, policiesor procedures.  The other Rights Agentsare in the process of identifying qualified candidates to replace Mr. Rhodesas Independent Rights Agent.

 

As of July 25, 2005, Mr. Durrettwas the beneficial owner of 323,536 rights certificates, Ms. Weed was thebeneficial holder of 47,736 rights certificates and Abrams Capital LLC was thebeneficial owner of 3,023,700 rights certificates. None of IRI Holdings, Inc.,Information Resources, Mr. Chisholm, Mr. Duffey or Mr. Rhodeswas a beneficial owner of rights certificates as of July 25, 2005,although Mr. Rhodes maintains a personal investment in the Abrams Capitalfunds that own rights certificates.

 

On March 6, 2004,the rights agents engaged Monica M. Weed, former General Counsel of InformationResources, to assist them in the day-to-day management of the antitrustlitigation and to perform such other duties as the rights agents may delegateto Ms. Weed from time to time. Ms. Weed has in-depth and specificknowledge of the facts underlying the litigation and, as General Counsel ofInformation Resources, was responsible for managing the day-to-day matters inthe antitrust litigation from 1998 through the effective date of the contingentvalue rights agreement, when the CVR Rights Agents took over day-to-daymanagement responsibility for the antitrust litigation. Ms. Weed iscompensated at the rate of $350 per hour, plus reimbursement of her reasonableout-of-pocket expenses. As of April 1, 2004, when Ms. Weed beganreceiving $5,000 per month as compensation for serving as a CVR Rights Agent(see “—Compensation and Expenses of

 

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Rights Agents” below),she began providing services to the rights agents at no additional charge forthe first $5,000 of services rendered each month.

 

COMPENSATION AND EXPENSES OF RIGHTS AGENTS. Beginning December 2003,the CVR Rights Agents are to be paid at least $5,000 per month on thefirst day of each month until the last rights certificate payment date, and theIndependent Rights Agent may be paid a fair and reasonable amount ofcompensation until the last payment date that is agreed to by a majority of therights agents (other than the Independent Rights Agent). These payments arepayable as claims expenses (see “—Funding of Claims Expenses”). Generally, allreasonable expenses and disbursements incurred by the rights agents inconnection with the discharge of their duties will also be payable byInformation Resources as claims expenses. The Parent Rights Agents are notentitled to any compensation for their service as Parent Rights Agents. As ofJune 30, 2005, the total amount of $ 60,000 was incurred as compensationpayments to the CVR Rights Agents for the first half of 2005. Mr. Rhodeshas not sought any compensation in connection with his services as theIndependent Rights Agent.

 

LIABILITY AND INDEMNIFICATION OF RIGHTS AGENTS. The rights agents willnot be liable for any acts or omissions except to the extent that the rightsagents have engaged in willful misconduct or bad faith. The rights agents willbe indemnified and held harmless from and against any and all liabilities,obligations, losses, damages, penalties, actions, judgments, suits, costs,reasonable expenses and reasonable disbursements of any kind or naturewhatsoever (including for their own ordinary or gross negligence) that may beimposed on, asserted against or incurred by them under the contingent valuerights agreement. The rights agents will not have the right to be indemnifiedunder the contingent value rights agreement for their own willful misconduct orbad faith.

 

REMOVAL AND APPOINTMENT OF RIGHTS AGENTS. The rights agents may resignat any time by giving written notice of resignation to IRI Holdings, Inc.,the trust and the other rights agents. Any Parent Rights Agent may be removedby IRI Holdings, Inc. at any time and all of the rights agents (other thanthe Independent Rights Agent) may remove the Independent Rights Agent at anytime. A CVR Rights Agent may not be removed by any party. If a Parent RightsAgent resigns, is removed or becomes incapable of acting, IRI Holdings, Inc.will promptly appoint a qualified successor Parent Rights Agent, which may bean officer of IRI Holdings, Inc. If a CVR Rights Agent resigns, isremoved, or becomes incapable of acting, the remaining CVR Rights Agent willpromptly appoint a qualified successor who is a rights certificate holder. Ifthe Independent Rights Agent resigns, is removed or becomes incapable ofacting, his or her successor will be appointed by the unanimous agreement ofthe remaining rights agents. Additional mechanisms are in place if a successorCVR Rights Agent is not chosen as set forth above.

 

**Material Federal Income Tax Consequences**

 

For Federal income tax purposes, the trust is treated as a “grantortrust” and is not intended to be an association taxable as a corporation, jointventure, partnership or other entity. Accordingly, each holder of a rightscertificate will be treated for Federal income tax purposes as the owner of apro rata share of the trust’s assets and will be treated as receiving anyamounts received by the trust when those amounts are received by the trust (andas making payments to third parties when the trust pays such amounts). Thetrust files Form 1041, U.S. Income Tax Return for Estates and Trusts. Theholders of rights certificates are provided an information statement reportingtheir portion of the trust’s income/loss.

 

**Risk Factors**

 

**The Second Circuit Court of Appeals could determine that the DistrictCourt’s December 3, 2004 inlimine ruling from whichInformation Resources is appealing was not a final judgment and thereforedismiss the appeal.**

 

On January 27, 2005, the U.S. District Court issued a stipulatedorder dismissing all of Information Resources’ remaining claims with prejudiceand on the merits for the purpose of allowing Information Resources to take animmediate appeal. At the same time, the court entered a final judgment againstInformation Resources. Effective February 1, 2005, Information Resourcesfiled a Notice of Appeal from the final judgment, as well as from the

 

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court’s orders dated July 12, 2000 and February 6, 2001,pursuant to which the court denied Information Resources and/or itssubsidiaries the right to sue under the Sherman Act for damages suffered inthose European markets where Information Resources sold its InfoScan servicesthrough its subsidiaries. The Second Circuit Court of Appeals could determinethat the district court’s inlimine ruling was not a finaljudgment, in which case the Second Circuit Court of Appeals would likelydismiss Information Resources’ appeal and remand the case to the district courtfor further proceedings consistent with the Second Circuit’s decision. If thiswere to occur, it is not clear what further proceedings would transpire at thispoint. While Information Resources believes this outcome is unlikely, there canbe no assurances as to the future actions to be taken by the Second CircuitCourt of Appeals.

 

**There can be no assurance that Information Resources will prevail onall or any part of its appeal before the Second Circuit Court of Appeals or anysubsequent appeals, if necessary.**

 

While IRI believes that it has a strong case on appeal, there can be noassurances that IRI will prevail on all or any part of its appeal before theSecond Circuit Court of Appeals or any subsequent appeals, should these becomenecessary, nor can there be any assurance that Information Resources willsucceed in obtaining any recovery or be able to make any payment from the trustto the holders of rights certificates. In its appeal before the Second CircuitCourt of Appeals, the court could affirm all of the district court’s rulingsthat are the subject of the appeal, reverse all of the district court’s rulingsthat are the subject of appeal or affirm in part and reverse in part. IfInformation Resources succeeds in its appeal before the Second Circuit in itsentirety such that the final judgment, including the January 27, 2005stipulated order, the July 12, 2000 order and the February 6, 2001order, are reversed, Information Resources will likely seek an immediate trialof all claims that were dismissed by the January 27, 2005 order, as wellas those claims that Information Resources and/or its subsidiaries wereprevented from pursuing by the July 12, 2000 and the February 6, 2001orders. In this event, Information Resources’ damage claim will increase by anamount not yet determined, but in excess of those damages calculated in theexpert report of Professor Franklin Fisher initially filed on February 27,2004, for the additional losses suffered in those European markets whereInformation Resources sold its services through subsidiaries. If, instead, thefinal judgment is affirmed with respect to the district court’s July 12,2000 and February 6, 2001 rulings, but reversed with respect to thestandard set out by the district court in its December 3, 2004 ruling,then Information Resources will likely seek an immediate trial of the sameclaims for which it was seeking redress immediately prior to the district court’sDecember 3, 2004 ruling, claiming the same damages as those calculated inthe February 27, 2004 expert report of Professor Franklin Fisher.Alternatively, if the final judgment is affirmed with respect to the standardset out by the district court in its December 3, 2004 ruling, but reversedwith respect to the district court’s July 12, 2000 and February 6,2001 rulings, then Information Resources will consider its possible courses ofaction, including, but not limited to, further appeals as set forth in the followingparagraph or an immediate trial of all claims for damages suffered byInformation Resources and/or its subsidiaries in European markets whereInformation Resources sold its services through its subsidiaries, subject tothe district court’s December 3, 2004 ruling.

 

If Information Resources does not prevail on any part of its appealbefore the Second Circuit Court of Appeals, Information Resources’ immediaterecourse will likely be to seek a rehearing *en banc* fromthe Second Circuit. If that is unsuccessful, Information Resources would beentitled to seek review by the Supreme Court of the United States. If suchreview is denied, the case will be concluded. If Information Resources decidesnot to seek review by the Supreme Court or the Supreme Court denies InformationResources’ right to such a review, or having obtained the right to such areview, Information Resources does not obtain a favorable ruling from theSupreme Court, no award of monetary damages will be made to InformationResources and therefore, no monetary payment will be possible from the trust tothe holders of rights certificates except to the extent any funds remain in theescrow fund at the conclusion of the litigation, in which case such funds shallbe disbursed to the holders of rights certificates in accordance with the termsof the contingent value rights agreement. In the event that InformationResources does seek and obtain Supreme Court review and obtains a ruling in itsfavor, the case will likely be remanded to the United States Court of Appealsfor the Second Circuit for proceedings consistent with the Supreme Court’sruling.

 

At this time, none of the trust, IRI Holdings, Inc., the rightsagents, the litigation trustees, or any of their respective affiliates, is ableto predict which, if any, of the possible outcomes set forth above are likelyto occur, nor can any of the foregoing state with any certainty whatInformation Resources’ response will be should any of

 

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the possible outcomes set forth above actually occur.

 

**The antitrust litigation is controlled by rights agents whose interestsmay not be aligned with those of the rights certificate holders.**

 

The contingent value rights agreement provides that a body of five individualsacting as rights agents shall direct and supervise the antitrust litigation.Two rights agents were appointed by the Board of Directors of InformationResources that was in place immediately prior to the merger to represent theinterests of the rights certificate holders, two were appointed by IRI Holdings, Inc.,and those four individuals selected a fifth, independent rights agent. Inmaking any decision or determination with respect to the antitrust litigation,the rights agents are required to maximize the present value to IRI Holdings, Inc.and the trust of any potential future litigation proceeds. A decision to settlethe litigation requires the approval of a majority of the CVR Rights Agents andthe Parent Rights Agents, therefore, either of the CVR Rights Agents, votingtogether, or the Parent Rights Agents, voting together, will have an effectiveveto over any decision to settle the antitrust litigation.

 

The interests of IRI Holdings, Inc. in any settlement of theantitrust litigation will not necessarily be aligned with the interests of therights certificate holders. For example, IRI Holdings, Inc. may prefer asettlement that includes, in addition to cash payments, agreements by thedefendants to refrain from future unlawful anti-competitive conduct over analternative settlement that includes no such agreements, even if thealternative settlement offers higher cash payments. On the other hand, therights certificate holders, who would not derive the same benefit as IRIHoldings, Inc. from agreements by the defendants to refrain from futureunlawful anti-competitive conduct, presumably would prefer the alternativesettlement offering higher cash payments, which would result in correspondinglyhigher payments on the rights certificates. As stated above, however, each ofthe CVR Rights Agents, voting together, and the Parent Rights Agents, votingtogether, have the right to veto any settlement, and that veto would be finaland binding on the other rights agents, the trust and the rights certificateholders.

 

**There can be no assurances that the trust will have adequate funds toprosecute the litigation.**

 

Based on agreements now in place with professionals involved in theantitrust litigation, representations made by those professionals, and facts knownto the rights agents today, the rights agents believe that the trust will haveadequate funds to prosecute the litigation, including the current appellateactivity and any other appellate activity or retrial that may be necessary,given that the contingency fee arrangement Information Resources has enteredinto with Hagens Berman specifically covers all appellate activity related tothe litigation. In light of this, and based on current assumptions about theappeals process before the Second Circuit Court of Appeals, the rights agentsdo not expect the cost of the current appeals process in the Second Circuit tobe significant. However, there can be no assurances that the trust will haveadequate resources to fully prosecute the litigation, especially given theunpredictable nature of litigation generally. If the trust were not to haveadequate funds to fully prosecute the litigation, this could adversely affectthe litigation, decrease the amount of any payments to be made in connectionwith the litigation and increase the possibility that no payments will be madein connection with the litigation.

 

If necessary, the rights agents may also consider raising additionalfunds by causing the trust to incur indebtedness or issue additional rightscertificates. (See “Risk Factors—While the rights agents are not currentlyconsidering raising additional funds, the value of the rights certificates maybe reduced if the trust incurs debt or diluted if the trust issues additionalrights certificates.”)

 

**Information Resources has entered into additional contingency feearrangements with counsel which will reduce the percentage of the totalrecovery from the antitrust litigation that is available to rights certificateholders.**

 

As a result of the increase in the length of the litigation and in thescope of discovery and the litigation itself due to certain rulings in 2003 and2004, along with the related increase in legal fees and costs, the rightsagents entered into additional contingency fee arrangements in May of 2004with its current lead trial counsel and its former lead trial counsel in theantitrust litigation. (See “— Contingency Fee Arrangements” above.) Thesearrangements will reduce the percentage of total recovery from the litigationthat is available to rights certificate

 

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holders. However, these additional contingency fee arrangements mayalso increase the likelihood of Information Resources obtaining a higheroverall recovery in the litigation, thereby increasing the aggregate amountavailable for distribution to rights certificate holders.

 

**While the rights agents are not currently considering raisingadditional funds, the value of the rights certificates may be reduced if thetrust incurs debt or diluted if the trust issues additional rightscertificates.**

 

The declaration of trust authorizes the operating trustees of the trustto raise funds for the payment of trust expenses or, upon the instruction ofthe CVR Rights Agents, to fund expenses of the antitrust litigation in excessof $10 million, by either causing the trust to incur indebtedness thatrepresents debt of the trust (and not an ownership interest) for United Statesfederal income tax purposes or causing the trust to issue additional rightscertificates. Any such indebtedness will likely represent a prior claim on theassets of the trust, including any rights certificate payment amounts receivedpursuant to the contingent value rights agreement, and may reduce the aggregateamounts available for distribution to rights certificate holders. Any issuanceof additional rights certificates will have a dilutive effect on rightscertificate holders, reducing the percentage of the total rights certificatepayment amount that holders receive with respect to each rights certificate. Asof the date hereof, the litigation trustees have taken no actions to raiseadditional funds.

 

**Summary Financial Information**

 

The following is a summary that details the antitrust litigation escrowaccount expense activity for the year ended December 31, 2004 and theperiod ended June 30, 2005, as well as the amounts available to coverincurred but unpaid antitrust litigation expenses:

 
| ***Litigation Escrow Account Fund Balance,  December 31, 2003***                                                                                                         |   | $          | 10,045,548 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|------------|--------|
| Reimbursements to Information  Resources, Inc. or paid directly to third party providers out of the  escrow account as of December 31, 2004                         |   | (6,110,914 | )          |
| ***Interest Earned on Balance of Escrow Fund  as of December 31, 2004***                                                                                                 |   | 32,028     |       |
| ***Litigation Escrow Account Fund Balance,  December 31, 2004***                                                                                                         |   | 3,966,662  |       |
| Reimbursements to Information  Resources, Inc. or paid directly to third party providers out of the  escrow account from January 1, 2005 through June 30, 2005 |   | (804,331   | )          |
| ***Interest Earned on Balance of Escrow Fund  from January 1, 2005 through June 30, 2005***                                                                         |   | 32,479     |       |
| ***Litigation Escrow Account Fund Balance,  June 30, 2005***                                                                                                             |   | 3,194,810  |       |
| ***EXPENSES***                                                                                                                                                                |   |       |       |
| Claims Expenses Reimbursable to Information  Resources, Inc. for services rendered / expenses incurred as of  June 30, 2005                                         |   | (6,095     | )          |
| Rights Agents Fees Reimbursable to  Information Resources, Inc. for services rendered / expenses incurred as  of June 30, 2005                                      |   | (10,000    | )          |
| Claims Expenses Incurred but Unpaid by  Information Resources, Inc. for services rendered / expenses incurred as  of June 30, 2005                                  |   | (88,346    | )          |
| Total Claims Expenses                                                                                                                                                         |   | (104,441   | )          |
|                                                                                                                                                                          |   |       |       |
| ***Funds Available for Future Claims Expenses  as of June 30, 2005***                                                                                                    |   | $          | 3,090,369  |   |

 

**Forward Looking Information**

 

Statements and financial discussion and analysis by the litigationtrustees contained throughout this Quarterly Report on Form 10-Q that arenot historical facts are forward-looking statements made pursuant to the safeharbor provisions of the Private Securities Litigation Reform Act of 1995.Forward-looking statements involve a number of risks and uncertainties. Certainof these risks are discussed in the section of this Quarterly Reportentitled “Risk Factors.” For further information regarding these risks anduncertainties, please see the section of the Prospectus entitled “RiskFactors.”

 

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**ITEM 3.   *Quantitativeand Qualitative Disclosures About Market Risk.***

 

Not Applicable.

 

**ITEM 4.   *Controls andProcedures.***

 

The litigation trustees have concluded that the registrant’s disclosurecontrols and procedures are effective based on their evaluation of thesecontrols as of June 30, 2005.  Therehave been no changes in the registrant’s internal controls during the quarterended June 30, 2005, including over financial reporting, or in otherfactors that could significantly affect internal controls subsequent to thatdate.

 

**PART II — OTHER INFORMATION**

 

**ITEM 1.   *LegalProceedings.***

 

The Registrant is not a party to any legal proceedings.  For a discussion of the litigation in whichthe Registrant has an interest, see Part I, Item 2, “Management’sDiscussion and Analysis of Financial Condition and Results of Operations — TheLitigation.”

 

**ITEM 6.   *Exhibits.***

 

(a)       Exhibits

 
| 10.1 |   | Amended and Restated Declaration of Trust (1)                                                                                                                                                                                                                                                                                                                                                                                              |
|------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2 |   | Contingent Value Rights Agreement (2)                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3 |   | Amendment No. 1 to Contingent Value Rights Agreement (3)                                                                                                                                                                                                                                                                                                                                                                              |
| 31.1 |   | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act  of 2002, signed by Joseph P. Durrett filed with this Form 10-Q                                                                                                                                                                                                                                                                                                  |
| 31.2 |   | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act  of 2002, signed by Monica M. Weed filed with this Form 10-Q                                                                                                                                                                                                                                                                                                     |
| 32.1 |   | Certification of Quarterly Report by Litigation Trustee Joseph P.  Durrett furnished with this Form 10-Q. This Certification shall not be  deemed “filed” for purposes of Section 18 of the Securities Exchange Act  of 1934, or otherwise subject to the liability of that section, nor shall it  be incorporated by reference into any filing of the Securities Act of 1933 or  the Securities Exchange Act of 1934. |
| 32.2 |   | Certification of Quarterly Report by Litigation Trustee Monica M.  Weed furnished with this Form 10-Q. This Certification shall not be  deemed “filed” for purposes of Section 18 of the Securities Exchange Act  of 1934, or otherwise subject to the liability of that section, nor shall it  be incorporated by reference into any filing of the Securities Act of 1933 or  the Securities Exchange Act of 1934.    |

 

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(1)           Exhibit is incorporated byreference to the Current Report on Form 8-K, filed with the SEC onNovember 12, 2003

(2)           Exhibit is incorporated byreference to the Current Report on Form 8-K, filed with the SEC onNovember 12, 2003

(3)           Exhibit is incorporated byreference to the Current Report on Form 8-K, filed with the SEC onJanuary 21, 2004

 

26

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) of theSecurities Exchange Act of 1934, the Registrant has duly caused this report tobe signed on its behalf by the undersigned thereunto duly authorized.

 

Dated: August 1, 2005

 

 
|   | INFORMATION RESOURCES, INC.  CONTINGENT RIGHTS PAYMENT TRUST |
|--------|--------------------------------------------------------------|
|   |                                                         |   |
|   | By:                                                          | /s/ JOSEPH P. DURRETT |
|   |                                                         | Joseph P. Durrett |
|   |                                                         | Litigation Trustee |

 

Pursuant to the Requirement of the Securities Exchange Act of 1934,this report has been signed below by the following persons on behalf of theRegistrant and in the capacities indicated on August 1, 2005.

 
| **Signature**         | ** ** | **Title**          |
|-----------------------|------------|--------------------|
|                  |       |               |
| /s/ JOSEPH P. DURRETT |       | Litigation Trustee |
| Joseph P. Durrett     |       |               |
|                  |       |               |
| /s/ MONICA M. WEED    |       | Litigation Trustee |
| Monica M. Weed        |       |               |

 

**INDEXTO EXHIBITS**

** **
| 10.1 |   | Amended and Restated Declaration of Trust (1)                                                                                                                                                                                                                                                                                                                                                                                              |
|------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.2 |   | Contingent Value Rights Agreement (2)                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10.3 |   | Amendment No. 1 to Contingent Value Rights Agreement (3)                                                                                                                                                                                                                                                                                                                                                                              |
| 31.1 |   | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act  of 2002, signed by Joseph P. Durrett filed with this   Form 10-Q                                                                                                                                                                                                                                                                                                |
| 31.2 |   | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act  of 2002, signed by Monica M. Weed filed with this   Form 10-Q                                                                                                                                                                                                                                                                                                   |
| 32.1 |   | Certification of Quarterly Report by Litigation Trustee Joseph P.  Durrett furnished with this Form 10-Q. This Certification shall not be  deemed “filed” for purposes of Section 18 of the Securities Exchange Act  of 1934, or otherwise subject to the liability of that section, nor shall it  be incorporated by reference into any filing of the Securities Act of 1933 or  the Securities Exchange Act of 1934. |
| 32.2 |   | Certification of Quarterly Report by Litigation Trustee Monica M.  Weed furnished with this Form 10-Q. This Certification shall not be  deemed “filed” for purposes of Section 18 of the Securities Exchange Act  of 1934, or otherwise subject to the liability of that section, nor shall it  be incorporated by reference into any filing of the Securities Act of 1933 or  the Securities Exchange Act of 1934.    |

 

----

(1)           Exhibit is incorporated byreference to the Current Report on Form 8-K, filed with the SEC onNovember 12, 2003

(2)           Exhibit is incorporated byreference to the Current Report on Form 8-K, filed with the SEC onNovember 12, 2003

(3)           Exhibit is incorporated byreference to the Current Report on Form 8-K, filed with the SEC onJanuary 21, 2004

 

27

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