|
Related Parties
|
12 Months Ended |
|---|---|
|
Dec. 31, 2011
|
|
| RELATED PARTIES [Abstract] | |
| Related Parties [Text Block] | RELATED PARTIES Non-voting Common Stock Issuance In February 2011, the Board authorized the issuance and sale, by way of a private placement, of 2,181,660 shares of non-voting common stock for $17.2 million in gross proceeds. Included in the stock issuance of non-voting common stock were a total of 1,899,336 shares sold to Howard Schultz and to several partnerships of Maveron LLC, a venture capital firm co-founded by Mr. Schultz, for an aggregate purchase price of $15.0 million. Mr. Schultz is a member of the Board. CityDeal Loan Agreement In connection with the CityDeal acquisition, the Company and the former CityDeal shareholders (including Oliver Samwer, Marc Samwer and Alexander Samwer) entered into a loan agreement, as amended, to provide CityDeal with an aggregate $25.0 million term loan facility (the “facility”). Both the Company and the former CityDeal shareholders each were obligated to make available $12.5 million under the terms of the facility, both of which were fully disbursed to CityDeal during the year ended December 31, 2010. The outstanding balance accrued interest at a rate of 5% per year and was payable upon termination of the facility, which was the earlier of any prepayments or December 2012. The outstanding balance payable to the former CityDeal shareholders at December 31, 2010 of $13.0 million, along with corresponding accrued interest of $0.1 million, is included in “Due to related parties” on the consolidated balance sheet. The amount due to the former CityDeal shareholders exceeds the amount of the facility in US dollars as a result of changes in foreign currency exchange rates throughout the year ended December 31, 2010. In March 2011, CityDeal repaid all amounts outstanding to the former CityDeal shareholders, including all accrued interest. There were no outstanding commitments remaining on the loan agreement with the former CityDeal shareholders at December 31, 2011 and CityDeal may not reborrow any part of the facility which was repaid. Technology and Other Services During 2011, the Company has entered into agreements with various companies in which Oliver Samwer, Marc Samwer and Alexander Samwer (the “Samwers”) have direct or indirect ownership interests, including Rocket Internet GmbH, as well as other companies in which certain subsidiary founders have direct interests, to provide information technology, marketing and other services to the Company. The Company recognized $1.4 million of expense for services rendered by companies owned by the Samwers and these other companies, for the year ended December 31, 2011, which was classified as selling, general and administrative expenses in the consolidated statement of operations. Merchant Contracts The Company entered into several agreements with merchant companies in which the Samwers have direct or indirect ownership interests, and, in some cases, are also directors of these companies, pursuant to which the Company conducts its business by offering goods and services at a discount with these merchants. The Company recognized $1.1 million and $2.4 million of expense under the merchant agreements for the years ended December 31, 2010 and 2011, respectively, which was recorded as an offset to revenue in the consolidated statement of operations. The Company had no amounts due to the Samwers as of December 31, 2010. The Company had $1.3 million due to these companies as of December 31, 2011, which was classified in ‘‘Accrued merchant payables’’ on the consolidated balance sheet. Consulting Agreements In May 2010, the Company entered into consulting agreements with the Samwers, which were amended in November 2010 and October 2011, pursuant to which they advise CityDeal, the Company's European subsidiary, with respect to its goals and spend at least fifty‑percent of their work hours consulting for CityDeal. The Company reimburses the Samwers for travel and other expenses incurred in connection with their service to the Company. They do not receive any additional compensation from the Company in connection with their consulting roles. The terms of Marc and Oliver's consulting agreements expire in October 2013 and October 2012, respectively. Legal Services The Company has engaged the law firm of Lefkofsky & Gorosh, P.C. (“L&G”), whose founder (Steven P. Lefkofsky) is the brother of the Company's co-founder and Executive Chairman of the Board, to provide certain legal services to the Company. Sublease Agreements The Company has entered into agreements with various companies in which certain of the Company's current and former Board members have direct or indirect ownership interests and, in some cases, who are also directors of these companies, pursuant to which the Company subleased a portion of office space in Chicago from these companies. Marketing Services During 2011, the Company transacted with InnerWorkings, Inc. (“InnerWorkings”), a company co-founded by the Company's co-founder and Executive Chairman of the Board, for promotional services. Amounts paid in advance to the InnerWorkings for services which had not yet been expensed totaled $1.3 million, which was recorded in “Prepaid expenses and other current assets” on the consolidated balance sheet. E-Commerce King Limited Joint Venture In January 2011, Groupon B.V. entered into a joint venture along with Rocket Asia GmbH & Co. KG (“Rocket Asia”), an entity controlled by the Samwers. On July 31, 2011, the Company entered into an agreement to purchase additional interests in E-Commerce for a purchase price of $45.2 million from Rocket Asia consisting of 2,908,856 shares of non-voting common stock. The investment increased the Company's ownership from 40.0% to 49.0%. See Note 6 “Investments in Equity Interests.” |