Within days of each other, two U.S. government agencies issued decisions in ongoing proceedings concerning Getty Images. On March 13, the U.S. Securities and Exchange Commission closed its 16-month inquiry into Getty Images' equity compensation grant practices. On March 18, the Federal Trade Commission cleared the way for the company to go private.

Though somewhat routine, obtaining FTC clearance is an important step that allows the going-private transaction to proceed to its planned conclusion during the second quarter. In the past five days, Getty Images stock price has been rising slowly but steadily, reaching $31.99 at press time.

Despite the good news, Getty still has to contend with several lawsuits.

The company's 2007 annual report discloses that, as a result of the SEC inquiry, it has been named as a party to two shareholder derivative lawsuits related to the stock option grant practices. Filed during the first quarter of 2007 in the Superior Court of the State of Washington and in the United States District Court for the Western District of Washington, both lawsuits allege violations of state law, including breaches of fiduciary duties, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment.

The annual report also reveals the existence of a shareholder class action against the company and its Board of Directors relating to the proposed Hellman & Friedman buy-out. Filed on February 25 in the Superior Court of the State of Washington, this lawsuit asserts that the terms of the definitive merger agreement are unfair to Getty Images shareholders.

Specifically, the plaintiffs contend that $34 per share is grossly inadequate due to the lack of "open bidding or a ‘market check' mechanism" and alleged self-dealing by Getty Images officers and directors. It is unclear if the class action will have any impact on the transaction.
According to the report, "Getty Images disputes the merits of these claims and intends to vigorously defend against them," though it cannot predict the outcome, time or expense involved. Further, the company's insurance coverage may not cover its total liabilities and expenses, should the plaintiffs prevail.