According to a press release dated September 15, 2011, the Company and its Board of Directors (the “Board”) with breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty under Vermont state law, and with violations of the Securities Exchange Act of 1934 (“1934 Act”).
The complaint alleges that the Board, aided and abetted by the Company, in bad faith and for self-interested reasons, tilted the sales process for the Company in favor of one bidder and against a second bidder, and thereby obligated the Company to improperly pay the first bidder a termination fee of $19.5 million when the merger agreement was later terminated after the second bidder made a superior proposal that was accepted by the Board. The end result of the Company’s and the Board’s misconduct was to destroy shareholder value in the same amount of the termination fee, or approximately $1.57 per share. The complaint seeks damages for the Board’s breaches of fiduciary duty in this regard.
The complaint further alleges that on August 29, 2011, the Company filed a Form DEFM 14A Proxy Statement that omitted or misrepresented material information regarding the proposed acquisitions in violation of §§14(a) and 20(a) of the 1934 Act and in contravention of the Board’s fiduciary duties under state law. The Proxy fails to disclose, among other things, material information regarding: (i) the Company’s current and future value; (ii) details about the sales process, including details concerning the favored treatment of the first bidder, and the conflicts of interests faced by the persons involved; and (iii) the financial analysis conducted by the Company’s financial advisor. Without this material information, the Company’s public shareholders are precluded from casting a fully informed vote. The complaint seeks injunctive relief in connection with defendants’ violations of §§14(a) and 20(a) of the 1934 Act.
On March 19, 2012, the Court issued an Order granting in part the Defendants' motion to dismiss Plaintiffs' Amended Complaint. Counts V and VI were dismissed without prejudice. The parties were granted twenty days from the date of this Order to submit memoranda as to the propriety of the court's exercising supplemental jurisdiction over Plaintiffs' state law claims.
On April 6, 2012, Plaintiffs filed a Second Amended Complaint.
On August 23, 2012, the Court issued an Order granting Defendants' motion to dismiss without prejudice Counts V and VI of Plaintiffs' Second Amended Complaint.
On November 6, 2012, a Stipulation of Voluntary Dismissal was entered into the Court's docket. This action was voluntarily dismissed with prejudice.