The Finish Line Inc. and UBS AG plan to appeal the Nashville judge's order that a $1.5 billion purchase of Genesco must go through. FINL and UBS want a Tennessee appeals court to decide the case before the March 3 start of a separate federal lawsuit filed New York.
UBS, which agreed to finance all but $11 million of the buyout, wants its commitment declared void because the Swiss bank argues the combined Genesco-Finish Line entity would become insolvent.
FINL and UBS said in documents filed in Nashville Chancery Court late last week that a successful appeal could make the New York case unnecessary. They also argue that an appeal would be problematic if Genesco prevails in the New York case, because UBS' commitment letter expires on April 30 and The Finish Line would likely be forced to finish the buyout.
“Unwinding the merger would be a complex undertaking with likely irreparable harm to all parties,” according to Finish Line's filing.
Nashville Chancellor Ellen Hobbs Lyle in December ruled that the buyers had no grounds for getting out of the agreement.
She ordered the deal to go through after dismissing claims that Genesco withheld key financial information that could have signaled worse-than-expected earnings after the deal closed in June. Genesco responded that its earnings were reflective of a drop in performance by its competitors, including The Finish Line.
Lyle ruled The Finish Line and UBS were sophisticated enough to know what they were getting into with the $54.50-per-share purchase. But she said her order won't be final until after the results of the New York case are known.
