Some shareholders of Bandag Inc. have filed a lawsuit against the Muscatine-based retreading systems, equipment and materials supplier for allegedly failing to seek purchasing offers from potential buyers other than Bridgestone Americas Holdings (BAH) Inc.
The suit was filed Dec. 8 in the Muscatine County District Court in the state of Iowa by Plumbers and Pipefitters Local 572 Pension Fund and is seeking class-action status on behalf of all shareholders.
The complaint alleges that Bandag's directors ``breached their fiduciary duties of due care and good faith by failing to solicit bids from other potential bidders and failing to maximize shareholder value and by creating deterrents to third-party offers,'' according to Bandag's preliminary proxy statement to shareholders.
The complaint names Bandag Chairman, CEO and President Martin Carver and directors Gary Dewel, R. Stephen Newman, Roy Carver Jr., James Everline, Phillip Hanrahan and Amy Hutton as defendants. The suit seeks a court order enjoining the consummation of Bridgestone's acquisition of Bandag and directing the defendants to ``take appropriate steps to maximize shareholder value.''
``While the lawsuit is in its preliminary stage, we believe that the claims in the lawsuit are without merit and intend to vigorously defend it,'' Bandag said in the proxy statement. The company declined to comment further on the pending litigation.
BAH annnounced Dec. 5 that it would acquire Bandag in a $1.05 billion cash deal. The acquisition is expected to close either late in the first quarter or early in the second quarter. The Bandag spokesman said that to date the company's shareholders have not yet voted on the proposed deal.