Wednesday, March 30, 2016

Class action lawsuit filed to halt Empire District Electric/Liberty merger

An Empire District Electric Company shareholder filed a class action lawsuit March 24 seeking to halt the proposed merger of Empire District Electric Company and Liberty Utilities.

The plaintiff in the lawsuit, which was filed in the 3rd Judicial District in Shawnee County, Kansas, is Adrienne Halberstam.  Listed as defendants, in addition to Empire District Electric Company, Liberty Utilities, and Liberty's parent company, Canadian-based Algonquin Power & Utiilities Corp. are Empire CEO Bradley Beecher and members of Empire District Electric's board of directors.

The complaint says the board breached its fiduciary duties by agreeing to the merger,

In an SEC filing, Empire District Electric officials said the lawsuit has the potential of creating a roadblock for the merger:

The outcome of the lawsuit cannot be predicted with any certainty. A preliminary injunction could delay or jeopardize the completion of the merger, and an adverse judgment granting permanent injunctive relief could indefinitely enjoin completion of the merger. All of the defendants believe that the claims asserted against them in the lawsuit are without merit.

The lawsuit is not the first time Halberstam has attempted to block deals and/or mergers.

In a similar case filed in 2011, Halberstam, family members, and IBEW Local 98 Pension Fund filed a class action lawsuit in U. S. District Court for the District of Vermont, accusing the board of directors of Central Vermont Public Service Corp. of breaching is fiduciary duty by initially approving a $30.27 per share sale agreement to Fortis that would provide continued employment for the company's top officers, and ignoring a bid of $34 per share from Gaz Metro, a Canadian company.

Eventually, Gaz Metro increased its offer to $35.25 per share and Central Vermont's board of directors reconsidered and sold to the Canadian company, but had to pay a $19 million penalty to Fortis,

That case was eventually dismissed with prejudice.

Halberstam is also involved in a similar class action suit filed in 2015 claiming that executives and board members of Teco Energy in Florida breached their fiduciary duty when reaching a merger agreement with Emera US Inc.

Teco reached a settlement with Halberstam and her co-plaintiffs and was forced to reveal more information about how the merger was reached in its SEC proxy statement filings.
 

1 comment:

Unknown said...

Get over it. Stop being Greedy.