Third Lawsuit Filed in Connection With the Proposed Acquisition of Goody's
October 14 2005 - 5:48PM
PR Newswire (US)
Plaintiff in Prior Action Seeks Temporary Restraining Order
KNOXVILLE, Tenn., Oct. 14 /PRNewswire-FirstCall/ -- Goody's Family
Clothing, Inc. (NASDAQ:GDYS) today announced that a third complaint
has been filed in connection with its previously announced
Agreement and Plan of Merger with certain affiliates of Sun Capital
Partners, IV. The complaint, which names both Goody's and its
directors as defendants, was also brought in Tennessee state court
and is seeking, among other things, certification as a class
action, injunctive relief or, in the alternative, rescission of the
proposed transaction, if it has then been consummated, and
unspecified damages. The complaint generally alleges 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
has yet been sought. The Company believes that this third
complaint, which generally contains similar allegations to the
prior two, is also without merit. The Company also announced that
the plaintiff in one of the two complaints filed earlier this week
had sought a temporary restraining order this morning against the
consummation of the transaction with Sun Capital. The Chancery
Court for Knox County, Tennessee, granted the Company's motion for
continuance of the initial hearing on this matter until October 26,
2005, relying upon representations from counsel to the Company at
the hearing that the transaction will not be consummated before
that date. Goody's, headquartered in Knoxville, Tennessee, is a
retailer of moderately priced family apparel, and with the
temporary closure of five stores due to hurricane damage, currently
operates 369 stores in the 20 states of Alabama, Arkansas, Florida,
Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana,
Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South
Carolina, Tennessee, Texas, Virginia and West Virginia. DATASOURCE:
Goody's Family Clothing, Inc. CONTACT: Regis Hebbeler, Senior Vice
President of Goody's Family Clothing, Inc., +1-865-966-2000
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