Kurz v. Emak Worldwide


12/04/09 – 12/04/09


Common shareholders attempt to redress an effort to thwart a consent solicitation by granting voting rights to preferred shareholders by marketing services provider EMAK Worldwide.

According to the complaint, EMAK'ss share price dropped from over $10 to less than $1 in less than four-and-a-half years, and its common stock was delisted and deregistered. Plaintiff Donald A. Kurz, a former Chief Executive Officer of EMAK, had led an effort to oust management. "Knowing that they could not hope to persuade outside common stockholders to support them," the complaint alleges, "EMAK's board stuffed the ballot box."

The plaintiffs assert that the bulk of EMAK's diminished enterprise value rested in its preferred stock, which carried a $25 million liquidation preference, but had no power to effect the election of a majority of the directors. However, one week after the initiation of the consent solicitation, EMAK's Board granted the preferred stockholder new preferred stock that carried the new right to vote with the common stock, giving the preferred shareholder a 28% blocking position.

The plaintiffs assert that the board effected this transaction without proper analysis; that its purported justification for the exchange was a pretext; that the common shareholders received nothing in exchange for the dilution of their voting rights; and that the distributed materials failed to disclose a stealth poison pill.

View a free video clip from the case:
Defense Attorney, Kenneth Nachbar -- Clip 1


Recording Disclaimer: This proceeding was recorded in full.

Suggest a Trial

Want to see a trial that you don't see in our list of upcoming trials?

Suggest a Case

CVN Essentials

The most important and informative moments of each trial

CVN Essentials

Video Library

Unlimited access to thousands of hours of past coverage of high stakes civil litigation

Video Library

  • Follow Us
  • Contact Us
  • 4901 Olde Towne Parkway
  • Suite 100
  • Marietta, GA 30068
  • 877-834-8627
  • 404-935-0321

Copyright 2024 Courtroom Connect.