LIVONIA, Mich., Aug. 30 -- Valassis Communications, Inc. today sued ADVO, Inc. in the Delaware Chancery Court to rescind its $1.3 billion merger agreement with ADVO based on fraud and material adverse changes, alleging that ADVO management materially misrepresented the financial health of the company and failed to reveal internal control deficiencies. According to the complaint, ADVO intentionally provided Valassis with "materially false financial information" and "withheld material information" at a time when the operating income was materially off forecast. The complaint also alleges that ADVO executives knew of, but did not disclose, significant internal control deficiencies associated with ADVO's enterprise- wide order-to-cash system. "We believe that taking this action is in the best interest of our shareholders," said Alan F. Schultz, Valassis Chairman, President and CEO. "ADVO left us with no choice. The pertinent information we received was erroneous, projections were grossly inaccurate and we believe we were the victims of fraud."