The Finish Line, Inc. on Thursday filed an answer to an amended complaint in the previously disclosed lawsuit filed by Genesco, Inc. in the Chancery Court in Nashville, TN relating to the proposed acquisition of Genesco by the The Finish Line. In that answer the FINL notified Genesco that it claims that a “Company Material Adverse Effect” has occurred under the Agreement and Plan of Merger dated as of June 17, 2007, among The Finish Line, Inc., Headwind, Inc., and Genesco, Inc.
Service of the answer under the Tennessee Rules of Civil Procedure and the merger agreement constitutes formal notice of the company's claim under Section 6.10 of the merger agreement. The Finish Line contends that a “Company Material Averse Effect” that is not cured in accordance with the terms of the merger agreement will cause a condition precedent to FINLs obligation to close the merger with Genesco to fail.
The Finish Line has previously reported that UBS Loan Finance LLC and UBS Securities LLC, who have signed a commitment letter regarding the companys financing for its proposed acquisition of Genesco, have also taken the position that the commitment letter may be terminated if a Material Adverse Effect as to Genesco has occurred.
