According to the latest docket posted, on March 13, 1997, the plaintiffs filed a Stipulation of Dismissal. On March 24, 1997, the Court entered the Order signed by U.S. District Judge Daniel T. K. Hurley dismissing the action with prejudice, and the case was closed.
The complaint was filed on behalf of all shareholders of record of Republic Industries Inc. ("Republic"), as of Dec. 16, 1996 (the "Class"), the date Republic filed its Proxy Statement with the Securities and Exchange Commission in connection with a proposed transaction whereby AutoNation, a privately held development stage company, will be merged into Republic, and each outstanding share of common stock of AutoNation will be converted into .217796 of a share of Republic common stock.
Specifically, the Complaint charges Republic and certain of its officers and directors with violations of Section 14(a) of the Securities Exchange Act of 1934 and breach of fiduciary duty. Among the persons named as Defendants are Republic's chairman of the board and chief executive officer as well as chairman of the board and a substantial shareholder of AutoNation and the co-chief executive officer, president and a director of Republic as well as chief executive officer and a substantial shareholder of AutoNation.
The Complaint alleges, among other things: that statements in the Proxy as to the fairness of the AutoNation merger, purportedly based upon a May 7, 1996 "fairness opinion" issued by Merrill Lynch, were false and misleading when made on Dec. 16, 1996; that, due to the sharp increase in the market value of Republic stock, the value of the consideration to be paid to AutoNation shareholders has increased from $215 million, at the time the merger was negotiated, to more than $643 million, resulting in a windfall to the shareholders of AutoNation, including Defendants Huizenga and Berrard; and that, in entering into a transaction whereby Republic and its shareholders had no protection from paying more than twice the price originally negotiated to acquire AutoNation, a development stage enterprise with no history of established earnings, the Defendants breached their duty to Republic and its shareholders.