Sport Supply Group announced that Jeffrey S. Abraham voluntarily dismissed with prejudice, a class action on behalf of all minority stockholders of the former Sport Supply Group, Inc. in connection with the Plan of Merger between Collegiate Pacific and the Old SSG.
Commenting on the voluntary dismissal, Adam Blumenfeld, Chairman and CEO stated: “We are pleased to have this lawsuit voluntarily dismissed, with prejudice. This was the last complaint outstanding related to the business combination between Collegiate Pacific and Sport Supply Group and it is always nice to put such issues to rest.”
The plaintiff brought the action as a class action on behalf of all minority stockholders of the former Sport Supply Group, Inc. in connection with the September 20, 2006 Agreement and Plan of Merger pursuant to which Collegiate Pacific acquired the remaining shares of the outstanding capital stock of Old SSG that Collegiate Pacific did not already own. The complaint was filed against Sport Supply Group, Inc. fka Collegiate Pacific, Old SSG and certain of their respective officers and directors.
The plaintiff alleged, among other things, that the $8.80 cash price per share of Old SSG common stock paid to the minority stockholders in the merger was unfair in that the purchase price failed to take into account the value of Old SSG, its improved financial results and its value in comparison to similar companies. In addition, the plaintiff alleged that the directors of Old SSG breached their fiduciary duties of good faith and loyalty to the plaintiff and the other minority stockholders in the merger agreement negotiations.
The plaintiff requested that the merger be enjoined or in the alternative, damages be awarded to the Old SSG minority stockholders. On January 31, 2007, the plaintiff amended his complaint and requested that the court certify plaintiff as the class representative of the proposed class and award plaintiff and the class compensating and/or rescissory damages. The plaintiff also sought the costs of bringing the action, including reasonable attorneys fees and experts fees.
