Friday, September 21, 2007
As predicted (and as I am quoted on today in the Wall Street Journal), Genesco has filed suit in Tennessee state court to enforce its rights under their agreement. Here is the complaint -- I'll try and have some commentary later today. The press release is below and has some great quotes -- this is the absolute right move by Genesco. And, as I have said before, Genesco appears to have a good case (see my post here outlining the likely legal arguments). The interesting thing to see now will be whether Finish Line attempts to implead UBS here, Finish Line's financing bank who appears to have also asserted a potential MAC against Genesco. If I were Finish Line I would before UBS sues for a declaratory judgment in New York -- the choice of forum for its commitment letter (for more on this possible jurisdictional shopping see my post here).
Genesco Files Lawsuit Against The Finish Line Seeking Specific Performance of Merger Agreement NASHVILLE, Tenn., Sept. 21 /PRNewswire-FirstCall/ --
Genesco Inc. (NYSE: GCO) announced today that it has filed suit in Chancery Court in Nashville, Tennessee, seeking an order requiring The Finish Line, Inc. to consummate its merger with Genesco and to enforce The Finish Line's rights against UBS under the Commitment Letter for financing the transaction.
Commenting on the filing, Genesco Chairman and Chief Executive Officer Hal N. Pennington said, "No more delays by The Finish Line and UBS; no more reservation of rights; no more bankers' putting their pencils down. We want a court of competent jurisdiction to enforce our rights under the Merger Agreement and for The Finish Line and UBS to live up to their obligations."
Pennington continued, "We have launched this litigation in an effort to speed consummation of the merger and to force impartial review of the aspersions that The Finish Line and its bankers have cast on Genesco's business and reputation. I, along with other members of the management team and our Board of Directors, are proud to be the stewards of a company that is a leader and innovator in its industry with a rich history dating to 1924. I am proud to be the leader of a group of employees who have helped build a wonderful business for the benefit of our shareholders."
Robert V. Dale, the presiding independent director of Genesco's Board of Directors, said, "Our Board of Directors stands united in this call for The Finish Line and UBS to perform their obligations and pay our shareholders $54.50 per share in cash. Our Board, our management team and our advisors are confident that the steps we are taking are in the best interests of our shareholders."
Pennington concluded, "Commencing litigation is always a difficult decision, but continued delay by The Finish Line and UBS is simply not acceptable. Accordingly, we are seeking expedited hearings on all of our claims. I caution our shareholders and employees that there will likely be claims made back against Genesco. When they come, we will be ready."