According to a complaint filed August 2, 2011, the defendants violated federal securities laws in a proposed merger.
The plaintiffs allege that the consideration to be paid to the class members is unfair and grossly inadequate because, among other things: (a) the intrinsic value of the stock of the Company is materially in excess of $38.75 per share, giving due consideration to the possibilities of growth and profitability of the Company in light of its business, earnings and earnings power, present and future; (b) the $38.75 per share price offers an inadequate premium to the public stockholders; and (c) the $38.75 per share price is not the result of arm's-length negotiations but was fixed arbitrarily by certain insiders to "cap" the market price of the Company as part of a plan for the bidder company to obtain complete ownership of the Company’s assets and business at the lowest possible price.
Further, the complaint states that the defendants breached their fiduciary duties by agreeing to lock up the Proposed Merger with deal protection devices that preclude other bidders from making a successful competing offer for the Company. Specifically, Defendants agreed to: (i) a nosolicitation provision that prevents other buyers from having access to the Company's confidential information which information is necessary to formulate a bid, except under extremely limited circumstances; (ii) a matching rights provision that allows the bidder company 3 days to match any competing proposal in the event one is made; and (iii) a provision that requires the Company to pay the bidder a termination fee of $395 million under specified circumstances, including the acceptance of a superior proposal by another party.
On July 25, 2011, the Company filed a Schedule 14D-9 with the Securities and Exchange Commission in connection with the Proposed Merger pursuant to which, inter alia, the Board of Directors recommended that the Company’s stockholders tender their shares in favor of the Tender Offer. In connection with the 14D-9, Defendants have breached their duty of candor by failing to disclose material information to 14D-9 shareholders necessary for them to determine whether to vote in favor of the Proposed Merger.
On October 4, 2011, the case was voluntarily dismissed, and that same day, Judge David Hittner signed the Order of Dismissal. The case is now terminated.