Some Unhappy Emmis Shareholders Head To Court
July 21, 2010 at 8:27 AM (PT)
Some EMMIS shareholders, unhappy with the proposed sale of the company, which has agreed to be acquired for more than $500 million including debt, had their day in court YESTERDAY (7/20), reports THE INDIANAPOLIS BUSINESS JOURNAL. EMMIS agreed in MAY to a purchase by JS ACQUISITION LLC, a private company formed by EMMIS Chairman/CEO JEFF SMULYAN.
The shareholders lawyers argued in Marion Superior Court for a delay, until they have more information to make a decision. "We’re not arguing the price," said CARL STEIN, a lawyer at NEW YORK-based WOLF POPPER LLP. "What we’re saying is that people should have the right to make a fully informed decision on whether they like the price."
THE JOURNAL wrote, "STEIN said EMMIS board members breached their fiduciary duty by not revealing key details to shareholders. Among them: Company debt covenants due in August 2011 are unlikely to be satisfied by a sale of assets or by a bank extension because of the tight credit markets."
EMMIS lawyers argued on MONDAY that common shareholders are prohibited under INDIANA law from blocking corporate transactions, noted the report. They instead can show their displeasure with a deal by selling shares on the open market, said RICHARD KEMPF, a lawyer at the INDIANAPOLIS office of CINCINNATI-based TAFT STETTINIUS & HOLLISTER LLP.