Reading International, Inc. (the “Company”) today announced that
the California Superior Court has issued a statement of decision
(the “Statement of Decision”) in the matter In Re: James V. Cotter,
Living Trust, Ellen Marie Cotter, Margaret Cotter, Petitioners, vs.
James J. Cotter, Jr., Respondent, Case No: BP159755 (the “Cotter
Trust Case”), relating to Mr. James J. Cotter, Jr.’s February 8,
2017 petition to appoint a temporary trustee ad litem (a “Temporary
TAL”) to pursue a sale of the Class B Voting-Stock owned, before
his death, by Mr. James J. Cotter, Sr. These shares represent more
than 66% of the outstanding voting
power of our Company. In response to Mr. Cotter, Jr.’s petition,
the California Superior Court has determined to appoint a Temporary
TAL “with the narrow and specific authority to obtain offers to
purchase the RDI stock in the voting trust, but not to exercise any
other powers without court approval, specifically the sale of the
company or any other powers possessed by the trustees.”
In a prior statement of decision dated December 8, 2017, the
California Superior Court determined Ellen Cotter and Margaret
Cotter to be the sole trustees of the James J. Cotter, Sr., Living
Trust (the “Cotter Trust”), and Margaret Cotter to the sole trustee
of the voting trust to be created under the Cotter Trust (the
“Voting Trust”). The Statement of Decision, except with respect to
the limited authority granted to the Temporary TAL, leaves Ellen
Cotter and Margaret Cotter in place as trustees, with all powers
granted to them under the applicable trust documents, over all
other matters relating to the Cotter Trust, the Voting Trust and
their respective assets, including authority to vote the Class B
Stock held by the Cotter Trust and/or the Voting Trust.
The Statement of Decision does not name a Temporary TAL, but
provides that if the parties cannot agree on a Temporary TAL, one
will be appointed at some future date by the California Superior
Court.
Our Company’s Board of Directors previously established a
Special Independent Committee comprised of directors William Gould
(our lead independent director who also serves as the Chair of the
Special Independent Committee), Judy Codding and Douglas McEachern
to, among other things, address any potential change of control
transaction relating to the sale of the shares of Class B Voting
Stock, which may now or in the future be held by the Cotter
Trust.
The Charter of the Special Independent Committee includes the
following statements: “Due to the fact that the Voting Stock held
by the [Cotter] Trust and the [Cotter] Estate represents less than
5% of the outstanding equity of the Company, there is a risk that
the interests of the person or group acquiring such a controlling
block would not be consistent with the long term business strategy
adopted by the Company’s Board or would otherwise be inconsistent
with the interest of holders of Class A Common Stock or other
holders of Class B Common Stock. The Board had previously
determined that it would be in the best interests of the Company
and its stockholders for the Company to pursue its long-term
business strategy as an independent company. Ellen Cotter, Margaret
Cotter, and/or an entity in which they have a controlling interest
may be involved in the Trust Share Sale Process as a potential
purchaser of such shares, and have advised the Board that they
intend to continue with the implementation of the business strategy
adopted by the Board. Mr. Cotter, Jr., voted against approval of
that business strategy.” A complete copy of the Special Independent
Committee Charter will be attached to our filing on Form 8-K, being
made with respect to this press release.
Our Company has advised the California Superior Court that it
opposes the appointment of a Temporary TAL, as it believes that
such an appointment is not in the best interests of our Company and
our stockholders generally. Such a marketing process, conducted
without the participation or support of the Board of Directors and
without any protections for minority stockholders, risks an
acquisition of control that does not reflect our Company’s value
and growth opportunities and transfers value from our stockholders
to a potentially unqualified individual or group. Moreover,
irrespective of who may eventually end up with control, such a
process risks distracting key employees from executing our business
plan and disrupting present and future business relations,
valuation creation strategies and development projects.
Our Board of Directors has not changed its position that it is
in the best interests of our Company and our stockholders generally
to continue the independent pursuit of our Company’s current
business plan and that a sale of the Company at this time would not
be in the best interests of stockholders generally. The Special
Independent Committee and our Board of Directors will monitor
further developments arising out of the Statement of Decision and
determine what steps, if any, should be taken in the best interests
of our Company and our stockholders generally.
As previously announced, on December 11, 2017, the District
Court in Nevada in the matter Cotter vs. Cotter, et al., Case No.:
A-15-719860-B, Dept. No. XXVII (the “Cotter Derivative Litigation”)
dismissed all derivative claims against Directors Judy Codding,
William Gould, Edward L. Kane, Doug McEachern and Michael Wrotniak
determining that Mr. James J. Cotter, Jr., had failed to
demonstrate any “genuine issues of material fact related to the
disinterestedness and/or independence of those directors.” On
December 29, 2017, these five directors (constituting a majority of
our Board of Directors) voted to ratify the actions of our Board of
Directors in terminating Mr. Cotter, Jr., as President and CEO, and
the actions of our Compensation Committee in permitting the Cotter
Estate to use shares of Class A Non-Voting Stock to pay the
exercise price of options held by the Cotter Estate to acquire
Class B Voting Stock. Based on this ratification, our Company
intends to seek dismissal of Mr. Cotter, Jr.’s derivative claims
relating to these actions.
About Reading International, Inc.
Reading International, Inc. (NASDAQ: RDI) is a leading
entertainment and real estate company, engaging in the development,
ownership and operation of multiplex cinemas and retail and
commercial real estate in the United States, Australia and New
Zealand.
The family of Reading brands includes cinema brands Reading
Cinemas, Angelika Film Centers, Consolidated Theatres, and City
Cinemas; live theaters operated by Liberty Theatres in the United
States; and signature property developments, including Newmarket
Village, Auburn Red Yard and Cannon Park in Australia, Courtenay
Central in New Zealand and 44 Union Square in New York City.
Additional information about Reading can be obtained from the
Company's website: http://www.readingrdi.com.
Forward-Looking
Statements
Our statements in this press release contain a variety of
forward-looking statements as defined by the Securities Litigation
Reform Act of 1995. Forward-looking statements reflect only our
expectations regarding future events and operating performance and
necessarily speak only as of the date the information was prepared.
No guarantees can be given that our expectation will in fact be
realized, in whole or in part. You can recognize these statements
by our use of words such as, by way of example, “may,” “will,”
“expect,” “believe,” and “anticipate” or other similar
terminology.
These forward-looking statements reflect our expectation after
having considered a variety of risks and uncertainties. However,
they are necessarily the product of internal discussion and do not
necessarily completely reflect the views of individual members of
our Board of Directors or of our management team. Individual Board
members and individual members of our management team may have
different views as to the risks and uncertainties involved, and may
have different views as to future events or our operating
performance.
Among the factors that could cause actual results to differ
materially from those expressed in or underlying our
forward-looking statements are the following:
- Future actions, developments and
decisions by one or more litigants, a temporary trustee ad litem or
other trustee or guardian appointed by a court, or the courts,
including appellate courts, in the above-described legal
matters.
- Future actions by members of the Cotter
family or their respective affiliates and representatives.
- Future actions by the Company’s Special
Independent Committee or the Board of Directors or any of the
Company’s stockholders.
- Future actions of third parties.
The above list is not necessarily exhaustive.
Given the variety and unpredictability of the factors that will
ultimately influence the matters covered in this press release, no
guarantees can be given that any of our forward-looking statements
will ultimately prove to be correct. Actual results will
undoubtedly vary and there is no guarantee as to how our securities
will perform, either when considered in isolation or when compared
to other securities or investment opportunities.
Finally, we undertake no obligation to publicly update or to
revise any of our forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be
required under applicable law. Accordingly, you should always note
the date to which our forward-looking statements speak.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180223005811/en/
Investor Contacts:Reading International, Inc.Dev Ghose,
Executive Vice President & Chief Financial OfficerAndrzej
Matyczynski, Executive Vice President for Global Operations(213)
235-2240orMedia Contacts:Joele Frank, Wilkinson Brimmer
KatcherEd Trissel or Matthew Gross(212) 355-4449
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