A Northern Virginia company has sued the McGraw-Hill publishing firm, charging that fees due for help in finding Data Resources Inc. as a potential acquisition for McGraw-Hill have not been paid.
In a complaint filed in U.S. District Court in Alexandria, Harlan Brown & Co. of McLean is seeking $1.5 million from McGraw-Hill -- $960,000, which Harlan Brown claims is the fee for finding Data Resources, $500,000 in punitive damages and court costs.
Data Resources (DRI), one of the nation's best known economic forecasting companies, has been acquired by McGraw-Hill under a $50-per share takeover offer announced in July. According to the lawsuit, 95 percent of DRI's shares already have been sold to McGraw-Hill in an overall transaction that is valued at $103 million.
A spokesman for McGraw-Hill said last night that the company has not seen the Harlan Brown complaint but that McGraw-Hill lawyers "are familiar" with the charges and have concluded there is "no merit" to the allegations. The lawyers said they are "confident they will win the case if it comes to trial," the spokesman added.
Harlan Brown stated that a predecessor firm, H. J. Brown International, signed a contract with McGraw-Hill in 1975 to conduct a market exploration program for the publishing giant, covering information industries "suitable for entry" by McGraw-Hill.
Subsequently, Harlan Brown claims, a preliminary report on DRI was submitted to McGraw-Hill, which published Business Week and other trade magazines as well as books and economic surveys. Additional reports on DRI were sent to McGraw-Hill in June 1976, February 1977 and April 1977, the McLean firm stated. In each instance, said Harlan Brown, the report "was submitted upon the specific request" of McGraw-Hill.