Goody's Family Clothing, Inc. reported that two complaints have been filed in connection with its previously announced Agreement and Plan of Merger with certain affiliates of Sun Capital Partners, IV. The complaints, which name both Goody's and its directors (and in one case, certain executive officers) as defendants, were brought in Tennessee state court and are seeking, among other things, certification as a class action, a determination that fiduciary duties were breached, injunctive relief against the proposed transaction and unspecified damages.
Together, the complaints allege that the defendants breached their fiduciary duties by accepting an inadequate offer, by failing to address other acquisition proposals, by taking steps to discourage other acquisition proposals, including an excessive termination fee, and generally failing to maximize shareholder value. No interim injunctive relief is being sought.
The company said it believes the complaints are without merit.
