Goody's Family Clothing announces Court to withheld $1mn
12 Dec '05
3 min read
Tennessee based clothing retailer Goody's Family Clothing Inc announced that the Chancery Court for Knox County, Tennessee, entered a temporary injunction requiring that $1,000,000 be withheld from the tender offer proceeds (approximately $0.03 per share) in connection with the announced Agreement and Plan of Merger between Goody's Family Clothing Inc and affiliates of GMM Capital LLC, and Prentice Capital Management, LP.
The Merger Agreement provides for a price of $9.60 per share.
The $1,000,000 amount is to be withheld pending determination of what amount of fees, if any, Plaintiffs' counsel are entitled to receive.
Prentice/GMM have advised Goody's that they are likely to exercise their right to extend the expiration of the tender offer for 10 business days.
Any extension of the tender offer will be made pursuant to an announcement and filing with the Securities and Exchange Commission by Prentice/GMM and this release does not constitute such an extension.
The temporary injunction was entered in connection with Plaintiffs' fourth class action lawsuit, which was filed on November 10, 2005 (the "Fee Complaint") in the consolidated action naming the Company, its directors, certain of its officers, GMM Capital LLC, Prentice Capital management, LP, and Acquisition Corp. as defendants.
The Fee Complaint alleges that the increase in tender offer price of $8.00 per share in the merger agreement previously entered into with affiliates of Sun Capital Partners, IV to the $9.60 per share in the Merger Agreement with affiliates of Prentice/GMM was caused by the Plaintiffs' lawsuits and related actions, and that counsel for the putative class are entitled to an award of attorneys' fees as a percentage of the total increase in value of the transaction.
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