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Wednesday, October 10, 2007

Genesco's Latest Filing

For those following the Genesco case, here is their latest filing yesterday in Tennessee Chancery Court.  Genesco's filing mainly addresses UBS's attempts to invoke the forum selection clause in their financing commitment letter to avoid being impleaded into the Tennessee litigation, and Finish Line's attempts to delay the Tennessee dispute to resolve this matter.  As Genesco states:   

Genesco has no objection to UBS and Finish Line agreeing to resolve their dispute in this Court, so long as their doing so does not further delay Genesco's claims against Finish Line. This Court should not, however, permit Finish Line - which, expressly agreed to fight its battles in different forums - to deny through delay the relief to which Genesco is entitled under the Merger Agreement because Finish Line no longer wants to recognize the forum selection clause in the Commitment Letter. If UBS will not agree to submit its dispute with Finish Line to this Court, then Finish Line must bring suit against UBS in New York as it agreed to do in the Commitment Letter.

Either way, these proceedings should proceed without further delay.  However much Finish Line might prefer that it were otherwise, there is no legitimate basis for Genesco's claim against Finish Line to be hostage to Finish Line's claim against UBS.  Finish Line's contrary arguments - that Finish Line's obligations under the Merger Agreement are contingent on UBS performing under the Commitment Letter and that, therefore, UBS is a "necessary party," are without merit. UBS is not a ''necessary party" to this lawsuit because Finish Line is required to timely close the merger irrespective of whether the UBS (or any alternative); financing is in place.  As set forth in the Complaint, the Merger Agreement does not contain a financing condition. To the contrary, the Merger Agreement contains an explicit agreement by the parties that there is no financing condition:

For avoidance of doubt, it shall not be a condition to Closing for Parent [Finish Line] or Merger Sub to obtain the [UBS] Financing or any alternative financing.

Once again Genesco has put things in just the right words.  I kind of/sort of feel bad for Finish Line at this point (for more on their position see my post yesterday here).  In the filing, I also noted for the first time that Genesco has hired superstar lawyer David Schiller at Boies, Schiller & Flexner in addition to Bass, Berry & Sims.  Talk about piling on. 

http://lawprofessors.typepad.com/mergers/2007/10/genescos-latest.html

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