WILMINGTON, Del. (Jan. 20, 2014) — Two law firms have filed a securities class-action lawsuit against Cooper Tire & Rubber Co. on behalf of stockholders over the failed merger deal with India's Apollo Tyres Ltd.
The suit claims Cooper and some of its senior executives violated federal securities laws by allegedly issuing misleading statements and omissions during its failed buyout by Apollo last year.
New York-based Law firms Entwistle & Cappucci L.L.P. and Bernstein Litowitz Berger & Grossmann L.L.P. announced they have filed the lawsuit against Findlay, Ohio-based Cooper Tire, CEO Roy Armes and CFO Bradley Hughes in the U.S. District Court for the District of Delaware. The plaintiffs include all purchasers of Cooper's publicly traded stock from June 12, 2013, through Nov. 8, 2013, inclusive, and all Cooper shareholders who held shares as of the record date of Aug. 30, 2013, and were entitled to vote with respect to the proposed merger between Cooper and Apollo, the firms said.
The lawsuit alleges Cooper falsely represented the significant risks associated with the merger by concealing the fact that the company lacked control over its joint venture manufacturing facility in China, Cooper Chengshan Tire Co. Ltd. (CCT) The plant was a major stumbling block in the merger negotiations after striking workers at the plant and the minority owner, Chengshan Group, reportedly blocked the tire companies from entering the plant or accessing financial information.
The lawsuit alleges Cooper concealed the fact that Chengshan Group — which holds a 35-percent interest in CCT — opposed the merger, and had in fact sought to acquire Cooper for itself.
That action followed the tire maker, in mid-November, telling the U.S. Securities and Exchange Commission that it would be unable to resume regular financial reporting at the troubled plant because of a worker strike and other factors.
The suit also alleges Cooper misrepresented its financial condition, financial prospects and the effectiveness of the company's internal controls.
Cooper shareholders voted to approve the merger Sept. 30, 2013, but then a series of disputes and lawsuits between Cooper and Apollo ended with Cooper formally terminating the agreement Dec. 30.
In October Cooper filed a Form 8-K with the SEC, disclosing that the merger was in jeopardy and that Cooper had filed a lawsuit against Apollo in an attempt to force Apollo to close the deal, according to the plaintiffs.
On Nov. 8 the Delaware Chancery Court denied Cooper's request for an order requiring Apollo to close on the merger, holding that Apollo had not breached the merger agreement. In response to these disclosures, Cooper stock fell from $31.27 per share on Oct. 3 to close at $23.82 per share on Nov. 8, according to the complaint.
With one-third of 2018 in the books, how would you characterize business thus far?
|Sales are behind where we were last year at this point.||
29% (36 votes)
|Our sales are about the same as last year.||
20% (25 votes)
|The first four months have been extremely strong; let's hope we can maintain it.||
33% (41 votes)
|One month up, one month down ...||
18% (22 votes)
|Total votes: 124|