**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C.  20549**

 

**FORM 10-Q**

 

**(MarkOne)**

 

**ý           Quarterly Report Pursuant to Section13 or 15(d) of The Securities Exchange Act of 1934.**

 

**For the quarterly period ended March 31, 2005**

 

**o           Transition report pursuant to Section13 or 15(d) of the Securities Exchange Act of 1934.**

 

**Commission file number 333-108592**

 

**INFORMATIONRESOURCES, INC. LITIGATIONCONTINGENT PAYMENT RIGHTS TRUST**

 (Exact name of registrant asspecified in its charter)

 

| **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** |
|                                                                       |       |                                 |
| Securities registered pursuant to Section 12(g) of the Act:           |

 

| **Title of  Each Class**             |
|--------------------------------------|
| Contingent Value Rights Certificates |

 

| **Name of  Exchange on Which Registered**                              |
|------------------------------------------------------------------------|
| None                                                                   |
| Listed on the OTC Bulletin Board under the symbol “IRICR.OB” |

 

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.   Yes  ý   No  o

 

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

 

AtApril 29, 2005, there were 32,135,728 rights certificates, no par value,outstanding.

 

 

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**PART I — FINANCIAL INFORMATION**

 

**Item1.  *Financial Statements.***

 

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

 

**BALANCE SHEETS**

 
| ** **                                                                                                                                                        | ** ** | **March 31, 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 32,135,217 and 32,128,143 were issued and outstanding,  respectively |       | —             |       | —                     |       |
| Contributed Capital                                                                                                                                               |       | 400,839            |       | 313,689                    |       |
| Accumulated Deficit                                                                                                                                               |       | (400,839           | )          | (313,689                   | )          |
| Total Certificateholders’ Equity                                                                                                                             |       | —             |       | —                     |       |
|                                                                                                                                                              |       |               |       |                       |       |
| TOTAL LIABILITIES AND CERTIFICATEHOLDERS’ EQUITY                                                                                                             |       | $                  | —     |                       | $          | — |   |

 

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

 

 

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

 

**STATEMENT OF OPERATIONS**

**(UNAUDITED)**

 
| ** **         | ** ** | **Three Months Ended** | ** ** | **Three Months Ended**  | ** ** |
|--------------------|------------|------------------------|------------|-------------------------|------------|
| ** **         | ** ** | **March 31, 2005**     | ** ** | **March 31, 2004** | ** ** |
| REVENUE            |       | $                      | —     |                    | $          | — |   |
|               |       |                   |       |                    |       |
| EXPENSES           |       |                   |       |                    |       |
| Rights Agents fees |       | (30,000                | )          | (30,000                 | )          |
| Legal fees         |       | (48,953                | )          | (57,753                 | )          |
| Audit fees         |       | (6,625                 | )          | (15,000                 | )          |
| Other fees         |       | (1,572                 | )          | —                  |       |
|               |       |                   |       |                    |       |
| Total expenses     |       | (87,150                | )          | (102,753                | )          |
|               |       |                   |       |                    |       |
| Net loss           |       | $                      | (87,150    | )                       | $          | (102,753 | ) |

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

 

 

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

 

**STATEMENT OF CASH FLOWS(UNAUDITED)**

 

 
| ** **                                       | ** ** | **Three Months Ended** | ** ** | **Three Months Ended** | ** ** |
|--------------------------------------------------|------------|------------------------|------------|------------------------|------------|
| ** **                                       | ** ** | **March 31, 2005**     | ** ** | **March 31, 2004**     | ** ** |
| CASH FLOWS FROM OPERATING ACTIVITIES:            |       |                   |       |                   |       |
|                                             |       |                   |       |                   |       |
| Net loss                                         |       | $                      | (87,150    | )                      | $          | (102,753 | ) |
|                                             |       |                   |       |                   |       |
| Net cash used by operating activities            |       | (87,150                | )          | (102,753               | )          |
|                                             |       |                   |       |                   |       |
| CASH FLOWS FROM FINANCING ACTIVITIES:            |       |                   |       |                   |       |
|                                             |       |                   |       |                   |       |
| Capital contribution from IRI Holdings, Inc.     |       | 87,150                 |       | 102,753                |       |
|                                             |       |                   |       |                   |       |
| Net cash provided by financing activities        |       | 87,150                 |       | 102,753                |       |
|                                             |       |                   |       |                   |       |
| 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 financial statements arean integral part of these statements.

 

 

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

**NOTES TO FINANCIAL STATEMENTS**

**(UNAUDITED)**

 

 

**1.     SUMMARY OF ACCOUNTING POLICIES**

 

**Principlesof Presentation**

 

The InformationResources, Inc. Litigation Contingent Payment Rights Trust (the “trust”)is a statutory trust created under Delaware law pursuant to an initialdeclaration of trust and the filing of a certificate of trust with the DelawareSecretary of State on August 27, 2003. The trust was created in connection with the tender offer by Gingko AcquisitionCorporation, a wholly-owned subsidiary of IRI Holdings, Inc. (formerly known asGingko Corporation), to purchase all outstanding shares of InformationResources, Inc. common stock (and associated preferred share purchase rights)for $3.30 net per share 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., TheA.C. Nielsen Company (now owned by VNU, N.V.) 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 belowunder “The Litigation”).

 

**InterimFinancial Statements**

 

Theinterim 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.     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 a fullor complete description of the legal or factual issues presented, the courtopinions rendered or the relevant law.

 

GENERAL.On July 27, 1996, Information Resources filed an antitrust lawsuit againstThe Dun & Bradstreet Corp., A.C. Nielsen Company and IMSInternational, Inc. in the United States District Court for the SouthernDistrict of New York entitled Information Resources, Inc. v. TheDun & Bradstreet Corp., et al. No. 96 CIV. 5716. In the lawsuit,Information Resources alleged that the defendants violated Sections 1 and2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, and the common law byengaging in a series of unlawful practices through which Information Resourcesclaimed that defendants attempted to regain monopoly power in the U.S. marketfor retail tracking services and exclude competition from 30 markets outsidethe U.S., where Nielsen dominated. Through the antitrust litigation,Information Resources sought to enjoin those practices and to recover damagesin excess of $650 million, before trebling. Information Resources demandeda trial by jury, and the case has been assigned to the Honorable Louis L.Stanton. It is Information Resources’ position that it continues to sufferdamages to this day as a result of the defendants’ allegedly unlawful practiceswhich it believes were aimed at undermining competition by financiallycrippling Information Resources. Information Resources is represented by thelaw firms of Hagens Berman Sobol Shapiro LLP (formerly Hagens Berman LLP),Freeborn & Peters LLP and Fried, Frank, Harris, Shriver & Jacobson LLPin the litigation.

 

RECENTEVENTS. On February 27, 2004, Information Resources filed its expertreport prepared by Professor Franklin Fisher, who, among other things, opinedboth on defendants’ liability and Information Resources’ damages. In general,Professor Fisher concluded that defendants engaged in a series ofanticompetitive practices, both in the U.S. and abroad, aimed at monopolizingthe U.S. market and excluding Information Resources from non-U.S. markets.Professor Fisher opined that a dangerous probability existed when defendantsundertook these practices that they would have monopolized the U.S. market hadgovernment 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 

 

 

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andprospective business relationship (Counts VII and VIII). As of October 31,2004, fact discovery in the case was completed.

 

OnSeptember 3, 2004, defendants filed two new motions: (1) a Motion forReconsideration of the court’s December 7, 1998 ruling that the EuropeanCommission’s Statement of Objections against defendants would be received intoevidence at trial, and (2) a Motion inLimine seeking to excludefrom trial evidence of certain of defendants’ retail tracking contracts. OnDecember 3, 2004, the court held that Information Resources was barred fromarguing that Nielsen’s pricing practices or discounts, including its bundlingpractices, were illegal or anti-competitive unless it could prove that theyinvolved prices below short-run average variable costs, calculated without theinclusion of Nielsen’s fixed operations costs. On January 27, 2005, the courtissued a stipulated order dismissing all of Information Resources’ remainingclaims with prejudice and on the merits for the purpose of allowing InformationResources to take an immediate appeal. At the same time, the court also entereda final judgment against Information Resources.

 

EffectiveFebruary 1, 2005, Information Resources filed a Notice of Appeal appealing tothe United States Court of Appeals for the Second Circuit the final judgmententered against it on January 27, 2005, including the court’s January 27, 2005order and its December 3, 2004 ruling, as well as its July 12, 2000 andFebruary 6, 2001 orders pursuant to which the court denied InformationResources and/or its subsidiaries the right to sue under the Sherman Act fordamages suffered in those European markets where Information Resources sold itsInfoScan services through its subsidiaries. On April 15, 2005, InformationResources, as appellant, filed its brief in the Second Circuit Court ofAppeals.  Appellees are required to filetheir responsive brief on or before May 16, 2005 unless they request and aregranted an extension. Information Resources will then have the opportunity tofile a reply brief thereafter. All briefs filed in this case with the SecondCircuit Court of Appeals are a matter of public record and should be availablefor viewing in the clerk’s office of the Second Circuit Court of Appeals.  Hagens Berman, Information Resources’ leadtrial counsel in this case, has also posted Information Resources’ April 15,2005 appellate brief on its website at www.hbsslaw.com.  Hagens Berman intends to make defendants’responsive appellate brief and Information Resources’ reply appellate briefavailable on its website once filed with the Second Circuit.  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, Information Resources sought damagesin excess of $350 million before trebling. As set forth above, onFebruary 27, 2004, Information Resources filed the expert report ofProfessor Fisher. In that report, Professor Fisher opined that InformationResources has suffered damages of between $545.4 million and $615.5 million(prior to trebling) in the U.S. market, as a result of defendants’ practicesthat Professor Fisher has concluded are anticompetitive and through whichProfessor Fisher concludes defendants sought to monopolize the U.S. market. Hehas also opined that Information Resources suffered damages of $21.0 million inCanada and $15.2 million in Mexico, as a result of practices that ProfessorFisher has concluded were anticompetitive and excluded Information Resourcesfrom these markets. If Information Resources succeeds on its appeal before theSecond Circuit Court of Appeals in its entirety, such that the final judgment,including the January 27, 2005 order, the July 12, 2000 order and the February6, 2001 order, are reversed, Information Resources will likely seek animmediate trial of all claims that were dismissed by the January 27, 2005order, as well as those claims that Information Resources and/or itssubsidiaries were prevented from pursuing by the July 12, 2000 and the February6, 2001 orders. In this event, Information Resources’ damage claim willincrease by an amount not yet determined, but in excess of those damagescalculated in the expert report of Professor Franklin Fisher initially filed onFebruary 27, 2004, for the additional losses suffered in those European marketswhere Information Resources sold its services through subsidiaries.

 

**3.     CLAIMS EXPENSES / ESCROWACCOUNT**

 

Claimsexpenses are generally incurred and paid by Information Resources and are thenreimbursed to Information Resources out of the escrow account referred to inthe next paragraph. “Claims expenses” means the sum of all direct expensesincurred after the date of the merger agreement by IRI Holdings, Inc.,Information Resources, Information Resources’ subsidiaries, and theiraffiliates to prosecute the antitrust litigation, generally (i) includingany amounts paid to or on behalf of the rights agents (the persons responsiblefor directing the antitrust litigation for the benefit of Information Resourcesand 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 the eventthat the rights agents direct employees of IRI Holdings, Inc., InformationResources, Information Resources’ subsidiaries, or their affiliates to performcertain 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 March 31, 2005, no amounts were owedto IRI Holdings, Inc. for employee time referred to in subparagraph (a) aboveor for credit support costs referred to in subparagraph (b) above.

 

Pursuantto the contingent value rights agreement, on December 12, 2003 IRIHoldings, Inc. placed the cash amount of $10 million, plus interest in theamount of $45,548, in an escrow account held by LaSalle Bank NationalAssociation as escrow agent, free of any liens or encumbrances of any kind(except as permitted in the contingent value rights agreement), to support theprosecution of the antitrust litigation and the payment of claims expenses. Theescrow account is in the name of Information Resources but is restricted in useto funding claims expenses for the antitrust litigation. As of March 31, 2005,the escrow account balance was $3,474,142.

 

Asof May 14, 2004, Information Resources engaged Hagens Berman Sobol Shapiro LLP(formerly Hagens Berman LLP) on a full contingency fee basis to serve asInformation Resources’ lead trial counsel in the antitrust litigation,including any appellate activity and retrial if necessary. Based on thecontingency 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 

 

 

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litigation,decrease the amount of any payments to be made in connection with thelitigation and increase the possibility that no payments will be made inconnection with the litigation.

 

Whilethe rights agents are not currently considering raising additional funds, thedeclaration of trust will permit the litigation trustees

ofthe trust, upon the instruction of the CVR Rights Agents, to raise funds to payexpenses of the antitrust litigation in excess of $10 million by eithercausing the trust to incur indebtedness that represents debt of the trust (andnot an ownership interest) for United States Federal income tax purposes orcausing 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.

 

Pursuantto the contingent value rights agreement, Information Resources will generallybe responsible for the expenses of the trust, subject to Information Resources’prior approval of those expenses. Information Resources will also beresponsible for all expenses relating to the indemnification obligations of thetrust described in the RegistrationStatement on Form S-4 with respect to the rights certificates, as filed by thetrust with, and declared effective by, the SEC on October 30, 2003 (SECFile Number 333-108592) (the “Prospectus”) or compliance with securitieslaws and the rules of the OTC Bulletin Board. Information Resources will not beresponsible for the expenses of the trust relating to indebtedness for borrowedmoney and as discussed above will be reimbursed for “claims expenses.” Anyexpenses not imposed on Information Resources as described above will begeneral obligations of the trust, payable out of the trust’s assets (includingout of any rights certificate payment amounts received pursuant to thecontingent value rights agreement). Information Resources will be entitled todeduct from the amounts payable to the trust under the contingent value rightsagreement certain expenses of the trust described in the contingent valuerights agreement.

 

**4.     COMPENSATION AND EXPENSESOF RIGHTS AGENTS**

 

Beginning December 2003, the rightsagents appointed by the Board of Directors of Information Resources that was inplace prior to the completion of the merger, referred to as the CVR RightsAgents, are each to be paid at least $5,000 per month on the first day of eachmonth until the last rights certificate payment date, and the independentrights agent appointed by the other rights agents, referred to as 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. 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 March 31,2005, the total amount of $30,000 was incurred as compensation payments to theCVR Rights Agents for the first quarter of 2005. Mr. Travis Rhodes, theIndependent Rights Agent, has not sought any compensation in connection withhis services as the Independent Rights Agent and has informed the trust that hewill not seek remuneration in the future for services as the Independent RightsAgent.

 

**5.     PAYMENTS TOCERTIFICATEHOLDERS**

 

Eachrights certificate entitles its holder to receive a pro rata portion of anyamount received by the trust in respect of antitrust litigation proceeds underthe terms of the contingent value rights agreement. Pursuant to the terms ofthe contingent value rights agreement, the trust will be entitled to be paid byIRI Holdings, Inc. an amount equal to 68% of any proceeds received byInformation Resources in respect of the antitrust litigation (whether bysettlement, judgment or otherwise), to the extent such proceeds are equal to orless than $200 million, and 75% of any such proceeds in excess of$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.

 

Thetrust 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. The paymentdates will be determined by the litigation trustees of the trust and, withrespect to any receipt of rights certificate payment amounts, will be no morethan 60 days following the receipt of those amounts. On each payment date,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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**ITEM2.   *Management’s Discussionand Analysis of Financial Condition and Results of Operations.***

 

**Introduction**

 

Asof 1996, Information Resources, Inc. (“Information Resources”) has beeninvolved in antitrust litigation (the “antitrust litigation” or the “litigation”)against The Dun & Bradstreet Corp., A.C. Nielsen Company (now owned by VNU,N.V.) and IMS International, Inc. (For a complete description of the litigationand its current status, see “The Litigation” below.) In December 2003, allof the outstanding shares of Information Resources common stock were acquiredby Gingko Acquisition Corp. pursuant to a tender offer and subsequent merger ofGingko Acquisition Corp. with and into Information Resources. In connectionwith this acquisition, the Information Resources, Inc. Litigation ContingentPayment Rights Trust (the “trust”) was created primarily to distribute anyproceeds from the litigation received by the trust to holders of rightscertificates. As part of the merger consideration paid by Gingko AcquisitionCorp., certain shareholders of common stock of Information Resources receivedcontingent value rights certificates (“rights certificates”), which representundivided 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 rights thereunder;(iii) payments made to the trust; (iv) expenses and escrow fund; (v) thelitigation and the management thereof; (vi) material federal income taxconsequences; and (vii) a summary of financial information. Also below is adiscussion of certain risk factors that may affect the trust and the rights ofholders of the rights certificates.

 

**Descriptionof 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), topurchase 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 ofSeptember 7, 2003, as amended, by and among Information Resources, GingkoCorporation and Gingko Acquisition Corp. The second-step merger wascompleted on December 12, 2003. The Registration Statement on Form S-4with respect to the rights certificates referred to in this document was filedby the trust with, and declared 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 The Dun & Bradstreet Corp., A.C.Nielsen Company and IMS International, Inc. in the United States DistrictCourt for the Southern District of New York, entitled InformationResources, Inc. v. The Dun & Bradstreet Corp., 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, 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 byGingko Acquisition Corp. of all outstanding shares of Information Resourcescommon stock, therewere 32,259,364 rights certificates authorized and issuable. At March 31,2005, 32,135,217 rights certificates had been issued and were outstanding asfollows:

 

 

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| **RECIPIENTS OF  RIGHTS CERTIFICATES**                          | ** ** | **NUMBER OF RIGHTS  CERTIFICATES ISSUED** | ** ** |
|-----------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                      | ** ** | ** **                                | ** ** |
| Information Resources common  stockholders                      |       | 30,452,751                                |       |
|                                                            |       |                                      |       |
| Information Resources stock  option and restricted stockholders |       | 1,682,466                                 |       |
|                                                            |       |                                      |       |
| Total rights certificates issued                                |       | 32,135,217                                |       |

 

 

At March 31, 2005, 3,629 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:

 

•holders of rights certificates who may be deemed to be “affiliates” of thetrust for purposes of Rule 145 under the Securities Act as of the date ofreceipt may 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 of IRI 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

•no transfer 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 the trust inrespect of proceeds received in the antitrust litigation. Pursuant to the termsof the contingent value rights agreement, the trust will be entitled to be paidby IRI Holdings, Inc. an amount equal to 68% of any proceeds received byInformation Resources in respect of the antitrust litigation (whether bysettlement, judgment or otherwise), to the extent such proceeds are equal to orless than $200 million, and 75% of any such proceeds in excess of$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. Theremaining 32% of any such proceeds, to the extent such proceeds are equal to orless than $200 million, and 25% of any such proceeds in excess of$200 million (again, in each case, subject to certain adjustmentsdescribed in the Prospectus) will be retained and remain the property ofInformation Resources and 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 received asa result of a settlement decision) or after a determination that no litigationproceeds will be received, IRI Holdings, Inc. will deliver to the rights agentsa certificate (a “litigation proceeds certificate”) which will include, amongother things:

 

•the amount of any cash proceeds and a detailed description of any non-cashproceeds received;

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

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

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

•the calculation of the amount to be paid to the trust with respect to thelitigation proceeds 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 whether he orshe agrees with or objects to the litigation proceeds certificate and therights certificate payment amount. If each CVR Rights Agent agrees, the rights

 

 

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certificate payment amount willbe as set forth in the litigation proceeds certificate. If either CVR RightsAgent objects, the contingent value rights agreement provides that such CVRRights Agent will promptly deliver to IRI Holdings, Inc. and to each otherrights agent a certificate specifying each objection. If the other CVR RightsAgent does not agree with the first CVR Rights Agent’s objections, then therights certificate payment amount will be the amount set forth in thelitigation proceeds certificate. If, within ten days of the delivery of one CVRRights Agent’s objections, the other CVR Rights Agent agrees, in whole or inpart, with the objections, the contingent value rights agreement states thatIRI Holdings, Inc. and the rights agents will submit the disputed matters to amutually agreed upon independent public accounting firm of national standingthat has expertise in the valuation of assets and properties. If thataccounting firm determines that those disputed matters were correct asreflected in the litigation proceeds certificate, the rights certificatepayment amount will be the amount set forth in the litigation proceedscertificate. If, however, the accounting firm determines that any of thedisputed matters were incorrect in any respect (whether or not material) as reflectedin the litigation proceeds certificate, the independent accounting firm’sresulting calculation of the rights certificate payment amount will be bindingon 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 payment amountwill be increased by the interest on that difference calculated from the date45 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 invested inspecified short-term instruments. All costs and expenses billed by the accountingfirm in connection with the performance of its duties described in thisprospectus will be paid by IRI Holdings, Inc.; *provided,however,* that if IRI Holdings, Inc.’s determination of the rightscertificate payment amount is:

 

•greater than or equal to 95% of the rights certificate payment amountdetermined by the accounting firm, then 100% of the costs and expenses billedby the accounting firm will be deducted from the rights certificate paymentamount;

•greater than or equal to 85% of the rights certificate payment amountdetermined by the accounting firm, but less than 95% of the rights certificatepayment amount determined by the accounting firm, then 50% of such costs andexpenses will be deducted from the rights certificate payment amount; or

•less than 85% of the rights certificate payment amount determined by theindependent accounting firm, then IRI Holdings, Inc. will not be reimbursed forany portion 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, absentmathematical 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:

 

• the receipt ofall gross litigation proceeds (as defined below);

• the prior paymentof any rights certificate payment amounts;

• assumed taxliabilities (computed by multiplying the amount at issue by an assumed tax rateof 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

• any payment of fees forservices provided by outside counsel in connection with prosecuting theantitrust litigation that are contingent on the success of the litigation (“contingency-basedfees”) from the date of the agreement to the date of determination of each suchsubsequent rights certificate payment amount.

 

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 paymentamount previously paid to the trust.

 

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

 

•First, by calculating the “basepreliminary rights certificate payment amount,” which equals (x) the “baserights certificate percentage” (generally 68%, and adjusted as described below)*times* the lesser of $200 million orthe amount of gross litigation proceeds (as defined below) actually received byInformation Resources and its subsidiaries or their affiliates through the dateof the litigation proceeds certificate applicable to such rights certificatepayment date *minus* (y) the base rightscertificate percentage *times* the assumedtax liability with respect the lesser of $200 million or all grosslitigation 

 

 

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proceedsactually received through the date of the litigation proceeds certificateapplicable to that rights certificate payment date *minus*(z) (I) the base rights certificate percentage *times*(II) one *minus* the assumed tax rate *times* (III) the amount of contingency-based fees that arecalculated on the basis of the portion of gross litigation proceeds that areless than or equal to $200 million. However, the base preliminary rightscertificate payment amount for the last rights certificate payment date will beincreased by the amount by which the claims expenses (as defined below) areless than $10 million, and will be further adjusted in respect of creditsupport costs as described below under “—Funding of Claims Expenses.”

• Second, bycalculating the “excess preliminary rights certificate payment amount”, whichequals (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 Resources and its subsidiaries or their affiliates through the dateof the 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”):

 

• the aggregateamount 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

• the aggregateamount 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 and their subsidiaries,but in each case only the aggregate amount in excess of the aggregate amountthat would have been paid if the rights certificates were non-transferablecontractual rights rather than publicly traded, registered securities (whichamounts shall be determined by decision of a majority of the rights agents or,if there are fewer than five rights agents, by unanimous approval of the rightsagents).

 

If the amount by which therights certificate payment amount is to be so reduced exceeds the rights certificatepayment amount otherwise payable on the relevant rights certificate paymentdate, then no payment will be made to the trust for that rights certificatepayment date and the amount of the excess reduction will be carried over toreduce future rights certificate payment amounts (but not below zero) until theentire 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. pursuantto the contingent value rights agreement. The payment dates will be determinedby the litigation trustees of the trust and, with respect to any receipt ofrights certificate payment amounts, will be no more than 60 days followingthe receipt of those amounts. On each payment date, the institutional trusteeof the trust will transfer the aggregate rights certificate payment amount tothe payment agent designated pursuant to the declaration of trust, and thepayment agent will promptly make payments to the holders.

 

**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. (SeePart I, Item 2 below — Summary Financial Information.) As used herein, the term“claims expenses” means the sum of all direct expenses incurred after the dateof the merger agreement by IRI Holdings, Inc., Information Resources,Information Resources’ subsidiaries, and their affiliates to prosecute theantitrust litigation, (i) generally including any amounts paid to or onbehalf of the rights agents but (ii) excluding (A) contingency-basedfees, (B) any payment of the independent accounting firm costs and expenses,(C) any fees, 

 

 

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expenses or costs associatedwith the trust and (D) any fees, expenses or costs associated withregistering 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 the eventthat the rights agents direct employees of IRI Holdings, Inc., InformationResources, Information Resources’ subsidiaries, or their affiliates to performcertain tasks in connection with the antitrust litigation and(b) specified costs incurred by IRI Holdings, Inc. in obtaining creditsupport for its obligation to fund claims expenses. As of March 31, 2005, noamounts were owed to IRI Holdings, Inc. for employee time referred to insubparagraph (a) above or for credit support costs referred to 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 March 31, 2005, theescrow account balance was $3,474,142.

 

Asof April 29, 2005, Information Resources has been reimbursed out of the escrowfund for certain claims expenses it has paid, and certain third party providershave been paid directly out of the escrow fund for other claims expenses, inthe total amount of $6,797,401. Information Resources has paid an additional amount of $43,434 for claimsexpenses for which Information Resources will be entitled to reimbursement outof the escrow fund upon presentation of a claims notice to the escrow agent.Information Resources has also received invoices for claims expenses in theamount of $32,484 that remain unpaid as of April 29, 2005. After disbursementof the foregoing amounts out of the escrow fund, the balance remaining in theescrow fund, including all interest earned on the balance as of March 31, 2005,will be $3,219,300.

 

PROCESS FOR RAISING ADDITIONAL FUNDS. Whilethe rights agents are not currently considering raising additional funds, thedeclaration of trust will permit the litigation trustees of the trust, upon theinstruction of the CVR Rights Agents, to raise funds to pay expenses of theantitrust litigation in excess of $10 million by either causing the trustto incur indebtedness that represents debt of the trust (and not an ownershipinterest) for United States federal income tax purposes or causing the trust toissue additional rights certificates. Any such indebtedness will likelyrepresent a prior claim on the assets of the trust, including any rightscertificate payment amounts received pursuant to the contingent value rightsagreement, and may reduce the aggregate amounts available for distribution torights certificate holders. Any issuance of additional rights certificates willhave a dilutive effect on rights certificate holders, reducing the percentageof the total rights certificate payment amount that holders receive withrespect to each rights certificate. As of the date hereof, the litigationtrustees have taken no actions to raise additional funds. There can be noassurance that the trust will be able to raise additional funds or, if thetrust is able to raise those funds, that the terms of that financing will bereasonable. If the trust is unsuccessful in raising additional funds, and ifthe failure to prosecute the antitrust litigation results in the dismissal ofInformation Resources’ claims, there will be a possibility of no payment on therights certificates.

 

CONTINGENCYFEE ARRANGEMENTS. On September 17, 2002, Information Resources enteredinto a partial contingency fee arrangement with Freeborn & Peters LLP, oneof the law firms representing it in the antitrust litigation. In May of 2004,Information Resources also entered into full contingency fee arrangements with HagensBerman Sobol Shapiro LLP (formerly Hagens Berman LLP), the lead trial counselin the antitrust litigation, and Boies, Schiller & Flexner LLP, the formerlead trial counsel in the antitrust litigation.

 

Underthe partial contingency fee arrangement with Freeborn & Peters, InformationResources is obligated to pay all legal fees Information Resources incurs forservices provided by Freeborn & Peters below a specific monthly cap,together with all expenses incurred by Freeborn & Peters in connection withthe antitrust litigation. Additionally, Information Resources has agreed that,if it settles the case after the trial commences or obtains a verdict in itsfavor, it will pay Freeborn & Peters an amount equal to the greater of(i) 5% of the value of what Information Resources recovers from thedefendants as a result of a judgment rendered against or a settlement withthem, or (ii) the difference between the actual fees paid by InformationResources to Freeborn & Peters in connection with the litigation and thefees that Information Resources would have incurred had it continued payingFreeborn & Peters for services rendered for the period January 1, 2002through the trial of the litigation at that firm’s standard rates. If thelitigation is settled and dismissed before the beginning of a trial on itsmerits, Information Resources will instead pay Freeborn & Peters$2.5 million as a contingency fee. Separate from the contingency feearrangement, Information Resources has also agreed to reimburse Freeborn &Peters for all discounts received by Information Resources on legal feesincurred in connection with the litigation and related matters through (i) theperiod ending December 31, 2001 if Information Resources settles orobtains a verdict in its favor after the trial commences, or (ii) the dateof settlement if a settlement occurs before the trial commences.

 

Underthe full contingency fee arrangement with Hagens Berman, Hagens Berman hasagreed to represent Information Resources through the trial in the litigation,as well as through any appeals or any retrial, in consideration for acontingency 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 

 

 

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expensesincurred by Hagens Berman and Information Resources to prosecute the litigationin accordance with a mutually agreed upon budget. Any expenses incurred inexcess of the budget will be advanced by Hagens Berman, to be reimbursed to itout of any balance in the escrow fund referred to above on mutually agreed uponterms. Substantially all costs (excluding legal fees for counsel representingInformation Resources in the litigation) paid directly or reimbursed byInformation Resources or out of the escrow fund since the inception of the casewill be deducted from any recovery before calculating Hagens Berman’scontingency fee. No contingency fee shall be paid to Hagens Berman on the awardby a court of fees, costs or interest.

 

Underthe contingency fee arrangement with Boies, Schiller & Flexner LLP, Boies,Schiller & Flexner was paid $250,000 in June 2004 as satisfaction infull of any expenses incurred by it on behalf of Information Resources duringits representation of Information Resources in the antitrust litigation.Further, as full and final satisfaction of any and all other amounts thatBoies, Schiller & Flexner has claimed or may claim are due to it inconsideration for its representation of Information Resources in the antitrustlitigation, Boies, Schiller & Flexner will be entitled to a contingency feeof $3 million out of any recovery received by Information Resources in the antitrustlitigation. If the contingency fee is not paid to Boies, Schiller & Flexneron or before July 15, 2005, this amount will begin to accrue interest, inan amount not to exceed $250,000, on July 16, 2005 at the rate of one-halfof one percent per month. Boies, Schiller & Flexner has agreed to looksolely to any recovery from the antitrust litigation for the payment of the $3million contingency fee and any interest that may accrue thereon.

 

Theadditional contingency fee arrangements entered into with Hagens Berman andBoies, Schiller & Flexner in May of 2004 will reduce the percentage of thetotal recovery from the antitrust litigation that is available to rightscertificate holders with respect to each rights certificate by the amount ofsuch contingency-based fees; however, these additional contingency feearrangements may also increase the likelihood of Information Resourcesobtaining a higher overall recovery in the litigation, thereby increasing theaggregate amount available for distribution to rights certificate holders. (See“Risk Factors—****Information Resources has enteredinto additional contingency fee arrangements with counsel which will reduce thepercentage of the total recovery from the antitrust litigation that isavailable to rights certificate holders.”)

 

EXPENSESOF THE TRUST. 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. Information Resourceswill also be responsible for all expenses relating to the indemnificationobligations of the trust described in the Prospectus or compliance withsecurities laws and the rules of the OTC Bulletin Board. Information Resourceswill not be responsible for the expenses of the trust relating to indebtednessfor borrowed money and as discussed above will be reimbursed for “claimsexpenses” paid by it. Any expenses not imposed on Information Resources asdescribed above will be general obligations of the trust, payable out of thetrust’s assets (including out of any rights certificate payment amountsreceived pursuant to the contingent value rights agreement). InformationResources will be entitled to deduct from the amounts payable to the trustunder the contingent value rights agreement those expenses of the trustdescribed 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 an antitrust lawsuit againstThe Dun & Bradstreet Corp., A.C. Nielsen Company and IMSInternational, Inc. in the United States District Court for the SouthernDistrict of New York entitled Information Resources, Inc. v. TheDun & Bradstreet Corp., et al. No. 96 CIV. 5716. In the lawsuit,Information Resources alleges that the defendants violated Sections 1 and2 of the Sherman Act, 15 U.S.C. Sections 1 and 2, and the common law byengaging in a series of unlawful practices through which Information Resourcesclaims that defendants attempted to regain monopoly power in the U.S. marketfor retail tracking services and exclude competition from 30 markets outsidethe U.S., where Nielsen dominated. Through the antitrust litigation,Information Resources seeks to enjoin those practices and to recover damages inexcess of $650 million, before trebling. Information Resources demanded atrial by jury, and the case has been assigned to the Honorable Louis L.Stanton. It is Information Resources’ position that it continues to sufferdamages to this day as a result of the defendants’ allegedly unlawfulpractices, which it believes were aimed at undermining competition byfinancially crippling Information Resources.

 

DEFENDANTS’PRACTICES. Information Resources asserts that, for over 60 years, Nielsenhad dominated the markets for retail tracking services, both within and outsidethe U.S., through its manual, audit-based services. In 1986, InformationResources introduced its retail tracking service known as “InfoScan,” the world’sfirst national retail tracking service based on scanner data. InformationResources alleges that, due to the success of the InfoScan service, by 1992Information Resources had gained a significant share of the U.S. market. At thesame time, Information Resources began to undertake efforts to expand andexport its services to new geographic markets in Western Europe and Canada,where, Information Resources asserts, Nielsen continued to exercise monopolypower.

 

InformationResources claims that, faced with a threat to Nielsen’s foreign monopolies andthe loss of market share in the U.S., 

 

 

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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:

 

•    unlawfullytying/bundling services in markets in which defendants had monopoly power withservices in markets in which Nielsen competed with Information Resources;

•    enteringinto exclusionary contracts with retailers in several countries in order todeny Information Resources’ access to the sales data necessary to provideretail tracking services or to artificially raise the cost of that data;

•    predatorypricing;

•    acquiringforeign market competitors with the intent of impeding Information Resources’efforts at geographic expansion;

•    tortiouslyinterfering with Information Resources’ contracts and relationships withclients, joint venture partners and other market research companies;

•    disparagingInformation Resources to financial analysts and clients; and

•    denyingInformation Resources access to the capital markets necessary for it tocompete.

 

THEGOVERNMENT INVESTIGATIONS. When the defendants in the antitrust litigationrefused to end these practices, Information Resources alerted antitrustregulatory authorities in Canada, the United States and Europe. First,Information Resources complained to the Canadian Director of Investigation andResearch concerning exclusive data contracts with retailers and long-termcontracts with manufacturers that Nielsen had executed in Canada. InformationResources claimed that those contracts prevented Information Resources’ entryinto the Canadian market. The Canadian Director of Investigation and Researchconducted an investigation and thereafter filed an application on April 5,1994 against Nielsen’s practices before the Canadian Competition Tribunal. OnAugust 30, 1995, the Canadian Competition Tribunal issued an order concludingthat Nielsen, the sole supplier of retail tracking services in Canada, hadunlawfully excluded Information Resources from the market. The CanadianCompetition Tribunal ordered that Nielsen could not enforce any of theprovisions of its contracts with retailers or manufacturers that the tribunalhad concluded were anticompetitive.

 

InformationResources also complained to the United States Department of Justice-AntitrustDivision in July 1994 and to the European Commission-Directorate GeneralIV in September 1994, concerning the defendants’ bundling practices withmultinational manufacturers and allegedly exclusionary data contracts withretailers in Europe. The Department of Justice and the European Commissionentered into a cooperation agreement, with the European Commission ultimatelytaking primary responsibility for the investigation.

 

OnMay 7, 1996, following an 18-month investigation, the European Commissioninitiated formal proceedings against Nielsen, the dominant provider of retailtracking services in Europe, and adopted a statement of objections. TheEuropean 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 theundertaking, the Department of Justice closed its investigation.

 

U.S.LEGAL PROCEEDINGS. On July 27, 1996, Information Resources filed itscomplaint, which asserts the following claims: Sherman Act Section 1Violation-Per Se Tying (Count I); Sherman Act Section 1Violation-Unreasonable Restraints of Trade (Count II); Sherman ActSection 2 Violation-Monopolization of the Export Markets (Count III);Sherman Act Section 2 Violation-Attempt to Monopolize the Export Markets(Count IV); Sherman Act Section 2 Violation-Attempt to Monopolize theUnited States Market (Count V); Sherman Act Section 2Violation-Monopoly Leveraging (Count VI); Tortious Interference withContract (Count VII); Tortious Interference with Prospective BusinessRelationship (Count VIII).

 

OnDecember 3, 2004, the U.S. District Court presiding over the litigation granteddefendants’ motion inlimine, holding that Information Resourceswas barred from arguing that Nielsen’s pricing practices or discounts,including its bundling practices, were illegal or anti-competitive unless itcould prove that they involved prices below short-run average variable costs,calculated without the inclusion of Nielsen’s fixed operations costs. OnJanuary 27, 2005, the court issued a stipulated order dismissing all ofInformation Resources’ remaining claims with prejudice and on the merits for thepurpose of allowing Information Resources to take an immediate appeal. At thistime, the court also entered a final judgment against Information Resources.Information Resources stipulated to the court’s order and to a final judgmentbeing entered against it because it could not meet the standard that the courtset forth in its December 3, 2004 inlimine order (as summarizedin the first sentence of this paragraph above). While Information Resources believesthat this standard is erroneous, it determined that it could not prove itsremaining claims without the critical evidence of Nielsen’s bundled contractsthat was excluded by the inlimine ruling.

 

EffectiveFebruary 1, 2005, Information Resources filed a Notice of Appeal with theUnited States Court of Appeals for the Second Circuit appealing the finaljudgment entered against it on January 27, 2005, as well as the earlier rulingspursuant 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 are required to file theirresponsive brief on or before 

 

 

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May16, 2005 unless they request and are granted an extension.  Information Resources will then have theopportunity to file a reply brief thereafter. All briefs filed in this casewith the Second Circuit Court of Appeals are a matter of public record andshould be available for viewing in the clerk’s office of the Second CircuitCourt of Appeals.  Hagens Berman, InformationResources’ lead trial counsel in this case, has also posted InformationResources’ April 15, 2005 appellate brief on its website atwww.hbsslaw.com.  Hagens Berman intendsto make defendants’ responsive appellate brief and Information Resources’ replyappellate brief available on its website once filed with the SecondCircuit.  All other materials filed withthe Second Circuit Court of Appeals in this case, if publicly available, shouldbe obtained directly from the clerk’s office of the Second Circuit Court ofAppeals.

 

TheCourt is currently in the process of scheduling a date for oral argument of theappeal, which is expected to occur sometime during the 2005 calendar year. (See“Risk Factors—****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.”) Thecontingency fee arrangement in place with Hagens Berman specifically covers allappellate activity related to the litigation. In light of this, and based oncurrent assumptions about the appeals process before the Second Circuit Courtof Appeals, the rights agents do not expect the cost of the current appealsprocess in the Second Circuit to be significant. (See “Risk Factors—****There can be no assurance that the trust will have adequatefunds to prosecute the litigation.”)

 

Duringthe course of the proceedings, the court has made the following non-discoveryrelated rulings, among others, and Information Resources and defendants haverecently taken the following key actions:

 

•    On May 6, 1997, the court denieddefendants’ motion to dismiss the complaint, with the exception of InformationResources’ claim for attempted monopolization of the U.S. market. With leavefrom the court, Information Resources filed an amended complaint onJuly 7, 1997, re-pleading this claim. On December 1, 1997, the courtdenied defendants’ motion to dismiss Information Resources’ amended claim forattempted monopolization of the U.S. market.

•    On December 7, 1998, the court issued aruling that barred defendants from denying certain findings and conclusions ofthe 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 Evidence 803(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 ruled thatInformation Resources had standing to assert its claims for injury in the U.S.as a result of defendants’ foreign conduct that allegedly drained InformationResources of U.S. resources necessary to compete in the domestic market, as setforth in Information Resources’ letters to the court dated November 15 andDecember 19, 2002. The court also denied defendants’ motion for summaryjudgment seeking to dismiss Information Resources’ claims of injury in the 22foreign markets not covered by its previous orders of July 12, 2000 andFebruary 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 trial dateto allow defendants additional time for discovery on Information Resources’claims of injury permitted by the court’s April 28, 2003 order withrespect to defendants’ foreign conduct that allegedly drained InformationResources of U.S. resources necessary to compete in the domestic market.

•    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 court officiallyadmitted the law firm of Hagens Berman Sobol Shapiro LLP (formerly HagensBerman LLP) in place of the law firm of Boies, Schiller & Flexner LLP toserve as co-counsel representing Information Resources in the antitrustlitigation.

•    On September 3, 2004, defendants filed twonew motions: (1) a Motion for Reconsideration of the court’s 

 

 

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December 7, 1998 ruling that the European Commission’s Statement ofObjections against defendants would be received into evidence at trial, and (2)a Motion inLimine seeking to exclude from trial evidence ofcertain of defendants’ retail tracking contracts.

•    As of October 31, 2004, fact discovery inthe case was completed.

•    On December 3, 2004, the court granteddefendants’ motion in limine, holding that Information Resourceswas barred from arguing that Nielsen’s pricing practices or discounts,including its bundling practices, were illegal or anti-competitive unless itcould prove that they involved prices below short-run average variable costs,calculated without the inclusion of Nielsen’s fixed operations costs.

•    On January 27, 2005, the court issued astipulated order dismissing all of Information Resources’ remaining claims withprejudice and on the merits for the purpose of allowing Information Resourcesto take an immediate appeal. Also on January 27, 2005, the court entered afinal judgment against Information Resources, pursuant to the stipulated orderand Rule 54 of the Federal Rules of Civil Procedure, dismissing InformationResources’ Amended Complaint with prejudice and on the merits so thatInformation Resources could take an immediate appeal.

•    Effective February 1, 2005, InformationResources filed a Notice of Appeal from the final judgment, which includes,among other things, the January 27, 2005 stipulated order of dismissal, as wellas the court’s orders dated July 12, 2000 and February 6, 2001, pursuant towhich the court denied Information Resources and/or its subsidiaries the rightto sue under the Sherman Act for damages suffered in those European marketswhere Information Resources sold its InfoScan services through itssubsidiaries.

•    On April 15, 2005, Information Resourcesfiled its brief in the Second Circuit Court of Appeals.  Appellees are required to file theirresponsive brief on or before May 16, 2005 unless they request and are grantedan extension.  Information Resources willthen have the opportunity to file a reply brief thereafter.

 

Itis Information Resources’ view that the court’s December 3, 2004 rulingimproperly extended and expanded the bright line test used for identifyingpredatory pricing to a different practice — bundling — resulting in thedismissal of Information Resources’ remaining claims for damages. It is alsoInformation Resources’ view that the court also failed to take account of thesynergistic effects of defendants’ several anti-competitive practices. Withrespect to Information Resources’ claims for damages in the European markets,it is Information Resources’ position that the court improperly granteddefendants’ motion for summary judgment denying Information Resources standing.Information Resources believes that the court then compounded this error bydenying Information Resources’ request to amend its complaint to add itssubsidiaries as plaintiffs.

 

IfInformation Resources succeeds in its appeal in its entirety such that thefinal judgment, including the January 27, 2005 stipulated order, the July 12,2000 order and the February 6, 2001 order, are reversed, Information Resourceswill likely seek an immediate trial of all claims that were dismissed by theJanuary 27, 2005 order, as well as those claims that Information Resourcesand/or its subsidiaries were prevented from pursuing by the July 12, 2000 andthe February 6, 2001 orders. In this event, Information Resources’ damage claimwill increase by an amount not yet determined, but in excess of those damagescalculated in the expert report of Professor Franklin Fisher initially filed onFebruary 27, 2004, for the additional losses suffered in those European marketswhere Information Resources sold its services through subsidiaries. If,instead, the final judgment is affirmed with respect to the district court’sJuly 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, thenInformation Resources will likely seek an immediate trial of the same claimsfor which it was seeking redress immediately prior to the district court’sDecember 3, 2004 ruling, claiming the same damages as those calculated in theFebruary 27, 2004 expert report of Professor Franklin Fisher. Alternatively, ifthe final judgment is affirmed with respect to the standard set out by thedistrict court in its December 3, 2004 ruling, but reversed with respect to thedistrict court’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 December3, 2004 ruling.  If Information Resourcessucceeds in its appeal in part or in its entirety, defendants will have theright to seek a rehearing *en banc* fromthe Second Circuit.  If that isunsuccessful, defendants would be entitled to seek review by the Supreme Courtof the United States.

 

IfInformation Resources does not prevail on any part of its appeal before theSecond Circuit Court of Appeals, Information Resources’ immediate recourse willlikely 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.

 

 

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Therecan be no assurance that Information Resources will prevail on all or any partof its appeal before the Second Circuit Court of Appeals or any further appealsshould these become necessary, nor can there be any assurance that InformationResources will succeed in obtaining any recovery or be able to make any paymentfrom the trust to the holders of rights certificates. (See “Risk Factors—****There can be no assurance that Information Resources willprevail on all or any part of its appeal before the Second Circuit Court ofAppeals or any subsequent appeals, if necessary.”) At this time, none of thetrust, IRI Holdings, Inc., the rights agents, the litigation trustees, or anyof their respective affiliates, is able to predict which, if any, of thepossible outcomes set forth above are likely to occur, nor can any of theforegoing predict with any certainty what Information Resources’ response willbe should any of the possible outcomes set forth above actually occur.

 

DAMAGES.In its original complaint, filed in 1996, Information Resources sought damagesin excess of $350 million before trebling. As set forth above, onFebruary 27, 2004, Information Resources filed the expert report ofProfessor Fisher. In that report, Professor Fisher opined that InformationResources has suffered damages of between $545.4 million and $615.5 million(prior to trebling) in the U.S. market, as a result of defendants’ practicesthat Professor Fisher has concluded are anticompetitive and through whichProfessor Fisher concludes defendants sought to monopolize the U.S. market. Hehas also opined that Information Resources suffered damages of $21.0 million inCanada and $15.2 million in Mexico, as a result of practices that ProfessorFisher has concluded were anticompetitive and excluded Information Resourcesfrom these markets. If Information Resources succeeds on its appeal before theSecond Circuit Court of Appeals in its entirety, such that the final judgment,including the January 27, 2005 stipulated order, the July 12, 2000 order andthe February 6, 2001 order, are reversed, Information Resources will likelyseek 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 February6, 2001 orders. In this event, Information Resources’ damage claim willincrease by an amount not yet determined, but in excess of those damagescalculated in the expert report of Professor Franklin Fisher initially filed onFebruary 27, 2004, for the additional losses suffered in those European marketswhere Information Resources sold its services through subsidiaries.

 

**None ofthe trust, IRI Holdings, Inc., Information Resources, or any of theirrespective affiliates, makes any representations as to the amount of anypotential recovery from the antitrust litigation or when, if ever, any recoverymay 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 terms of the contingentvalue rights agreement, the antitrust litigation is to be directed on behalf ofInformation Resources and the rights certificates holders by a body of five rightsagents: two CVR Rights Agents, two Parent Rights Agents and one IndependentRights Agent. Under the contingent value rights agreement, theCVR Rights Agents are responsible for overseeing the day-to-day workings of theantitrust litigation. However, the approval of a majority of the rights agentsis required for certain strategic decisions relating to the antitrustlitigation. Further, a majority of the rights agents (other than theIndependent Rights Agent) must approve any settlement of the litigation. The current CVR Rights Agents are Joseph P. Durrett, former ChiefExecutive Officer and Chairman of the Board of Directors of InformationResources, and Monica M. Weed, former General Counsel of Information Resources.The current Parent Rights Agents are William Chisholm, Executive Vice Presidentand a member of the Board of Directors of IRI Holdings, Inc., and MichaelDuffey, current Chief Financial Officer of Information Resources. OnJanuary 14, 2004, the CVR Rights Agents and the Parent Rights Agents unanimouslyselected Travis Rhodes, investment analyst at Abrams Capital LLC, as theIndependent Rights Agent. Mr. Rhodes was formerly employed by FidelityInvestments as a high-yield and distressed bond analyst. As of April 29, 2005,Mr. Durrett was the beneficial owner of 323,536 rights certificates, Ms. Weedwas the beneficial holder of 47,736 rights certificates and Abrams Capital LLCwas the beneficial owner of 3,023,700 rights certificates. None of IRIHoldings, Inc., Information Resources, Mr. Chisholm, Mr. Duffey or Mr. Rhodeswas a beneficial owner of rights certificates as of April 29, 2005, althoughMr. Rhodes maintains a personal investment in the Abrams Capital funds that ownrights 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 specific knowledge ofthe facts underlying the litigation and, as General Counsel of InformationResources, was responsible for managing the day-to-day matters in the antitrustlitigation from 1998 through the effective date of the contingent value rightsagreement, when the CVR Rights Agents took over day-to-day managementresponsibility for the antitrust litigation. Ms. Weed is compensated at therate of $350 per hour, plus reimbursement of her reasonable out-of-pocketexpenses. As of April 1, 2004, when Ms. Weed began receiving $5,000 permonth as compensation for serving as a CVR Rights Agent (see “—Compensation andExpenses of Rights Agents” below), she began providing services to the rightsagents at no additional charge for the first $5,000 of services rendered eachmonth.

 

COMPENSATION AND EXPENSES OF RIGHTSAGENTS. Beginning December 2003, the CVR Rights Agents are tobe paid at least $5,000 per month on the first day of each month until the lastrights certificate payment date, and the Independent Rights Agent may be paid afair and reasonable amount of compensation until the last payment date that isagreed to by a majority of the rights agents (other than the Independent RightsAgent). These payments are payable as claims expenses (see “—Funding of Claims 

 

 

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Expenses”).Generally, all reasonable expenses and disbursements incurred by the rightsagents in connection 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 ofMarch 31, 2005, the total amount of $30,000 was incurred as compensationpayments to the CVR Rights Agents for the first quarter of 2005. Mr. Rhodes hasnot sought any compensation in connection with his services as the IndependentRights Agent and has informed the trust that he will not seek remuneration inthe future for services as the Independent Rights Agent.

 

LIABILITYAND INDEMNIFICATION OF RIGHTS AGENTS. The rights agents will not be liable forany acts or omissions except to the extent that the rights agents have engagedin willful misconduct or bad faith. The rights agents will be indemnified andheld harmless from and against any and all liabilities, obligations, losses,damages, penalties, actions, judgments, suits, costs, reasonable expenses andreasonable disbursements of any kind or nature whatsoever (including for theirown ordinary or gross negligence) that may be imposed on, asserted against orincurred by them under the contingent value rights agreement. The rights agentswill not have the right to be indemnified under the contingent value rightsagreement for their own willful misconduct or bad faith.

 

REMOVALAND APPOINTMENT OF RIGHTS AGENTS. The rights agents may resign at any time bygiving written notice of resignation to IRI Holdings, Inc., the trust and theother rights agents. Any Parent Rights Agent may be removed by IRI Holdings,Inc. at any time and all of the rights agents (other than the IndependentRights Agent) may remove the Independent Rights Agent at any time. A CVR RightsAgent may not be removed by any party. If a Parent Rights Agent resigns, isremoved or becomes incapable of acting, IRI Holdings, Inc. will promptlyappoint a qualified successor Parent Rights Agent, which may be an officer ofIRI Holdings, Inc. If a CVR Rights Agent resigns, is removed, or becomesincapable of acting, the remaining CVR Rights Agent will promptly appoint aqualified successor who is a rights certificate holder. If the IndependentRights Agent resigns, is removed or becomes incapable of acting, his or hersuccessor will be appointed by the unanimous agreement of the remaining rightsagents. Additional mechanisms are in place if a successor CVR Rights Agent isnot chosen as set forth above.

 

**MaterialFederal Income Tax Consequences**

 

ForFederal income tax purposes, the trust is treated as a “grantor trust” and isnot intended to be an association taxable as a corporation, joint venture,partnership or other entity. Accordingly, each holder of a rights certificatewill be treated for Federal income tax purposes as the owner of a pro ratashare of the trust’s assets and will be treated as receiving any amountsreceived by the trust when those amounts are received by the trust (and asmaking payments to third parties when the trust pays such amounts). The trustfiles Form 1041, U.S. Income Tax Return for Estates and Trusts. The holders ofrights certificates are provided an information statement reporting theirportion of the trust’s income/loss.

 

**RiskFactors**

 

**TheSecond Circuit Court of Appeals could determine that the District Court’sDecember 3, 2004 inlimine ruling from which InformationResources is appealing was not a final judgment and therefore dismiss theappeal.**

 

OnJanuary 27, 2005, the U.S. District 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 entered a final judgment against InformationResources. Effective February 1, 2005, Information Resources filed a Notice ofAppeal from the final judgment, as well as from the court’s orders dated July12, 2000 and February 6, 2001, pursuant to which the court denied InformationResources and/or its subsidiaries the right to sue under the Sherman Act fordamages suffered in those European markets where Information Resources sold itsInfoScan services through its subsidiaries. The Second Circuit Court of Appealscould determine that the district court’s inlimine ruling wasnot a final judgment, in which case the Second Circuit Court of Appeals wouldlikely dismiss Information Resources’ appeal and remand the case to thedistrict court for further proceedings consistent with the Second Circuit’sdecision. If this were to occur, it is not clear what further proceedings wouldtranspire at this point. While Information Resources believes this outcome isunlikely, there can be no assurances as to the future actions to be taken bythe Second Circuit Court of Appeals.

 

**Therecan be no assurance that Information Resources will prevail on all or any partof its appeal before the Second Circuit Court of Appeals or any subsequentappeals, if necessary.**

 

WhileIRI believes that it has a strong case on appeal, there can be no assurancesthat IRI will prevail on all or any part of its appeal before the SecondCircuit 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, 2001 order, arereversed, Information Resources will likely seek an immediate trial of allclaims that were dismissed by the January 27, 2005 order, as well as thoseclaims that Information Resources and/or its subsidiaries were prevented frompursuing by the July 12, 2000 and the February 6, 2001 orders. In this event, 

 

 

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InformationResources’ 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 losses sufferedin those European markets where Information Resources sold its services throughsubsidiaries. If, instead, the final judgment is affirmed with respect to thedistrict court’s July 12, 2000 and February 6, 2001 rulings, but reversed withrespect to the standard set out by the district court in its December 3, 2004ruling, then Information Resources will likely seek an immediate trial of thesame claims for which it was seeking redress immediately prior to the district court’sDecember 3, 2004 ruling, claiming the same damages as those calculated in theFebruary 27, 2004 expert report of Professor Franklin Fisher. Alternatively, ifthe final judgment is affirmed with respect to the standard set out by thedistrict court in its December 3, 2004 ruling, but reversed with respect to thedistrict court’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 December3, 2004 ruling.

 

IfInformation Resources does not prevail on any part of its appeal before theSecond Circuit Court of Appeals, Information Resources’ immediate recourse willlikely 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.

 

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 state with any certainty what InformationResources’ response will be should any of the possible outcomes set forth aboveactually occur.

 

**Theantitrust litigation is controlled by rights agents whose interests may not bealigned with those of the rights certificate holders.**

 

Thecontingent 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 IRIHoldings, Inc., and those four individuals selected a fifth, independent rightsagent. In making any decision or determination with respect to the antitrustlitigation, the rights agents are required to maximize the present value to IRIHoldings, Inc. and the trust of any potential future litigation proceeds. Adecision to settle the litigation requires the approval of a majority of theCVR Rights Agents and the Parent Rights Agents, therefore, either of the CVRRights Agents, voting together, or the Parent Rights Agents, voting together,will have an effective veto over any decision to settle the antitrustlitigation.

 

Theinterests of IRI Holdings, Inc. in any settlement of the antitrust litigationwill not necessarily be aligned with the interests of the rights certificateholders. For example, IRI Holdings, Inc. may prefer a settlement that includes,in addition to cash payments, agreements by the defendants to refrain fromfuture unlawful anti-competitive conduct over an alternative settlement thatincludes no such agreements, even if the alternative settlement offers highercash payments. On the other hand, the rights certificate holders, who would notderive the same benefit as IRI Holdings, Inc. from agreements by the defendantsto refrain from future unlawful anti-competitive conduct, presumably wouldprefer the alternative settlement offering higher cash payments, which wouldresult in correspondingly higher payments on the rights certificates. As statedabove, however, each of the CVR Rights Agents, voting together, and the ParentRights Agents, voting together, have the right to veto any settlement, and thatveto would be final and binding on the other rights agents, the trust and therights certificate holders.

 

**Therecan be no assurances that the trust will have adequate funds to prosecute thelitigation.**

 

Basedon agreements now in place with professionals involved in the antitrustlitigation, representations made by those professionals, and facts known to therights 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 

 

 

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paymentswill be made in connection with the litigation.

 

Ifnecessary, the rights agents may also consider raising additional funds bycausing the trust to incur indebtedness or issue additional rights certificates.(See “Risk Factors—While the rights agents are not currently consideringraising additional funds, the value of the rights certificates may be reducedif the trust incurs debt or diluted if the trust issues additional rightscertificates.”)

 

**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.**

 

Asa result of the increase in the length of the litigation and in the scope ofdiscovery and the litigation itself due to certain rulings in 2003 and 2004,along with the related increase in legal fees and costs, the rights agentsentered into additional contingency fee arrangements in May of 2004 with itscurrent lead trial counsel and its former lead trial counsel in the antitrustlitigation. (See “— Contingency Fee Arrangements” above.) These arrangementswill reduce the percentage of total recovery from the litigation that is availableto rights certificate holders. However, these additional contingency feearrangements may also increase the likelihood of Information Resourcesobtaining a higher overall recovery in the litigation, thereby increasing theaggregate amount available for distribution to rights certificate holders.

 

**Whilethe rights agents are not currently considering raising additional funds, thevalue of the rights certificates may be reduced if the trust incurs debt ordiluted if the trust issues additional rights certificates.**

 

Thedeclaration of trust authorizes the operating trustees of the trust to raisefunds for the payment of trust expenses or, upon the instruction of the CVRRights Agents, to fund expenses of the antitrust litigation in excess of$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.

 

 

**SummaryFinancial Information**

Thefollowing is a summary that details the antitrust litigation escrow accountexpense activity for the year ended December 31, 2004 and the period endedMarch 31, 2005, as well as the amounts available to cover incurred but unpaidantitrust 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  March 31, 2005 |         | (507,563   | )          |
| ***Interest Earned on Balance of Escrow Fund from  January 1, 2005 through March 31, 2005***                                                                    | *** *** | 15,043     |       |
| ***Litigation Escrow Account Fund Balance,  March 31, 2005***                                                                                              | *** *** | 3,474,142  |       |
| ***EXPENSES***                                                                                                                                                  | * *     |       |       |
| Claims Expenses Reimbursable to Information Resources, Inc. for  services rendered / expenses incurred as of March 31, 2005                                     |         | (38,967    | )          |
| Rights Agents Fees Reimbursable to Information Resources, Inc. for  services rendered / expenses incurred as of March 31, 2005                                  |         | (20,000    | )          |
| Claims Expenses Incurred but Unpaid by Information Resources, Inc.  for services rendered / expenses incurred as of March 31, 2005                              |         | (185,875   | )          |
| Total Claims Expenses                                                                                                                                           |         | (244,842   | )          |
| * *                                                                                                                                                        | * *     |       |       |
| ***Funds Available for Future Claims Expenses as of  March 31, 2005***                                                                                          | *** *** | $          | 3,229,300  |   |

 

 

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**ForwardLooking Information**

 

Statementsand financial discussion and analysis by the litigation trustees containedthroughout this Annual Report on Form 10-K that are not historical facts areforward-looking statements made pursuant to the safe harbor provisions of thePrivate Securities Litigation Reform Act of 1995. Forward-looking statementsinvolve a number of risks and uncertainties. Certain of these risks arediscussed in the section of this Annual Report entitled “Risk Factors.”For further information regarding these risks and uncertainties, please see thesection of the Prospectus entitled “Risk Factors.”

 

**ITEM3.   *Quantitative andQualitative Disclosures About Market Risk.***

 

NotApplicable.

 

**ITEM4.   *Controls and Procedures.***

 

Thelitigation trustees have concluded that the registrant’s disclosure controlsand procedures are effective based on their evaluation of these controls as ofMarch 31, 2005.  There have been nochanges in the registrant’s internal controls during the quarter ended March31, 2005, including over financial reporting, or in other factors that couldsignificantly affect internal controls subsequent to that date.

 

**PART II — OTHER INFORMATION**

 

**ITEM1.   *Legal Proceedings.***

 

TheRegistrant 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’s Discussionand Analysis of Financial Condition and Results of Operations — The Litigation.”

 

**ITEM6.   *Exhibits and Reports onForm 8-K.***

 
|   | (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 by  reference to the Current Report on Form 8-K, filed with the SEC on November 12,  2003 |
|-----|--------|------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Exhibit is incorporated by  reference to the Current Report on Form 8-K, filed with the SEC on  November 12, 2003 |
| (3) |   | Exhibit is incorporated by  reference to the Current Report on Form 8-K, filed with the SEC on  January 21, 2004  |

 

 

21

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**SIGNATURES**

 

Pursuantto the requirements of Section 13 or 15(d) of the Securities Exchange Actof 1934, the Registrant has duly caused this report to be signed on its behalfby the undersigned thereunto duly authorized.

 

Dated:May 4, 2005

 

 

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

 

Pursuantto the Requirement of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the Registrant and in thecapacities indicated on May 4, 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 by reference to the Current Report on Form 8-K, filed with  the SEC on November 12, 2003 |
|-----|--------|------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Exhibit  is incorporated by reference to the Current Report on Form 8-K, filed with  the SEC on November 12, 2003 |
| (3) |   | Exhibit  is incorporated by reference to the Current Report on Form 8-K, filed with  the SEC on January 21, 2004  |

 

 

22

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