Hanover Direct Shareholder Litigation

VERDICT

Trial
09/14/09 – 09/18/09

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Play button overlay 45f08f27c7337d189e8c31e635b5d0a0781b273131135cd77ee8b6f12366e7a2

Summary

5-day bench trial over a shareholder challenge to the 2007 merger between Hanover Direct and its largest shareholder, hedge fund Chelsey Direct.

The smaller shareholders alleged that Hanover's directors had conflicts of interest in approving the merger agreement, and that an investment banker's valuation analysis was flawed, which allegedly allowed Chelsey to freeze out the purported minority shareholders and capture the true value of the Company for itself.

Hanover Direct announced on April 12, 2007, that it had completed the transaction at 25 cents per share, and had become a privately held company.

Outcome

The court found that a merger price of $0.25 for a company already below sea level was entirely fair.

Sessions

Recording Disclaimer: This proceeding was recorded in full.

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