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1
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PLAINTIFFS CONSENT TO CONSOLIDATION AND OPPOSITION TO DEFENDANTS MOTION TO DISMISS
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EXTRACTED KEY WORDS
DEFENDANTS PLAINTIFFS YORK TRACE FACTS DEL MOTION LLP CONSOLIDATION COMPLAINT COURT DISMISS COGAN COMPL SUPR SHAREHOLDERS NORTH LEXINGTON AVENUE INDEPENDENCE FIDUCIARY DUTIES WECHSLER HARWOOD LOWEY DANNENBERG HALEBIAN FEFFER LLP FEFFER LLP BEMPORAD SELINGER WHITE PLAINS BERNSTEIN LIEBHARD LIFSHITZ LLP NATURE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
----------------------------------------x
IN RE FOAMEX INTERNATIONAL INC. CONSOLIDATED
SHAREHOLDERS LITIGATION C.A. No. 16259-NC
----------------------------------------x
PLAINTIFFS' CONSENT TO CONSOLIDATION AND
OPPOSITION TO DEFENDANTS' MOTION TO DISMISS
ROSENTHAL MONHAIT
GROSS & GODDESS, P.A.
Norman M. Monhait
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys For Plaintiffs
Of Counsel:
WECHSLER HARWOOD LOWEY DANNENBERG
HALEBIAN & FEFFER LLP BEMPORAD & SELINGER, P.C.
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2
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THIRD AMENDED AND SUPPLEMENTAL CLASS ACTION AND DERIVATIVE COMPLAINT
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EXTRACTED KEY WORDS
DEFENDANTS PLAINTIFFS TRACE SHAREHOLDERS COGAN COMMON STOCK PURSUANT MERGER AGREEMENT COURT FINANCING CONNECTION FINANCIALS DELAWARE CONSOLIDATION SUBSIDIARIES PARAGRAPHS PUBLIC SHAREHOLDERS PUBLIC STOCKHOLDERS TRANSACTION SUCCESSORS-IN-INTEREST FIDUCIARY DUTIES INDIVIDUAL DEFENDANTS SPECIAL COMMITTEE CHIEF EXECUTIVE OFFICER DERIVATIVE COMPLAINT OBLIGATIONS MANAGEMENT AGREEMENT HIGHLY CONFIDENT LETTER MERGER SUB |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
-----------------------------------x
..
IN RE FOAMEX INTERNATIONAL INC. : CONSOLIDATED
SHAREHOLDERS LITIGATION : CIVIL ACTION NO. 16259-NC
-----------------------------------x
THIRD AMENDED AND SUPPLEMENTAL CLASS
ACTION AND DERIVATIVE COMPLAINT
Plaintiffs, by their attorneys, for their third amended
complaint against defendants, allege upon information and belief,
except for paragraph 6 hereof, which is alleged upon knowledge, as
follows:
1. Plaintiffs bring claims: (a) pursuant to Rule 23 of the
Rules of the Court of Chancery on their behalf and as a class
action on behalf of all persons, other than defendants and those in
privity with them, who owned the common stock of Foamex
International Inc. ("Foamex" or the "Company") as of June 25, 1998,
and as of August 5, 1999, and their successors in interest; and
(b) derivatively on behalf of Foamex, for damages in connection
with the waste and breaches of fiduciary duties by the directors of
Foamex, described below.
SUMMARY OF ACTION
2. Foamex is a holding company with a subsidiary which
develops, manufactures and markets flexible polyurethane foam used
in carpet products, furniture, bedding, automotive trim and
filtration products.
3. Trace International Holdings, Inc. ("Trace"), a Delaware
Corporation -- which, on July 11, 1999, filed for bankruptcy
protection -- beneficially owns approximately 46.1.% of Foamex's
outstanding common stock.
4. Defendant Marshall S. Cogan ("Cogan"), directly and
through Trace, of which he is the majority stockholder, and its
subsidiaries and affiliates, dominates and controls Foamex, and has
exercised his control over Foamex for his personal benefit, using
Foamex as his personal "piggy bank." For example, and as set forth
in more detail below:
(a) While Trace was in default to Foamex of
approximately $14 million in obligations, Foamex co:ntinued to pay
millions of dollars to Trace for "management" services and salaries
which Foamex did not even need.
(b) Cogan has awarded himself salary and bonuses from
SNIPPETS:
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3
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3RD AMENDED AND SUPPLEMENTAL CLASS ACTION AND DERIVATIVE COMPLAINT
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EXTRACTED KEY WORDS
PLAINTIFFS TRACE COGAN PURSUANT DEFENDANTS COURT DELAWARE MERGER AGREEMENT CHANCERY ESQUIRE COUNSEL GROSS WILMINGTON FINANCIALS FINANCING SHAREHOLDERS MARKET STREET MELLON BANK SUBSIDIARIES COMMON STOCK RODNEY SQUARE FIDUCIARY DUTIES PUBLIC STOCKHOLDERS TRANSACTION DIRECTORS INDIVIDUAL DEFENDANTS AFFILIATES CHIEF EXECUTIVE OFFICER GODDESS |
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
-----------------------------------x
IN RE FOAMEX INTERNATIONAL INC. : CONSOLIDATED
SHAREHOLDERS LITIGATION : CIVIL ACTION NO. 16259-NC
-----------------------------------x
NOTICE OF MOTION
TO: Allen M. Terrell, Jr., Esquire
Srinivas M. Raju, Esquire
Richards Layton & Finger
One Rodney Square
Wilmington, Delaware 19801
David C. McBride, Esquire
Young Conaway Stargatt t Taylor
Suite 1100, Rodney Square North
Wilmington, Delaware 19899
Alan J. Stone, Esquire
Morris Nichols Arsht & Tunnel1
1201 N. Market Street
Wilmington, Delaware 19899
PLEASE TAKE NOTICE that plaintiffs will present the
attached Motion To Amend to the Court at the earliest convenience
of the Court and counsel.
ROSENTHAL, MONHAIT, GROSS SC GODDESS, P.A.
By: Suite 1401, Mellon Bank Center
P.O. Box 1670
Wilmington, Delaware 19899-1070
(302) 656-4433
Attorneys for Plaintiffs
August 26, 1999
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
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4
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SECOND AMENDED AND SUPPLEMENTAL CLASS ACTION AND DERIVATIVE COMPLAINT
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EXTRACTED KEY WORDS
TRACE DEFENDANTS COGAN PLAINTIFFS MERGER AGREEMENT PURSUANT DIRECTORS FIDUCIARY DUTIES FINANCING COURT PARAGRAPHS DELAWARE FINANCIALS SUBSIDIARIES CONNECTION INDIVIDUAL DEFENDANTS DERIVATIVE COMPLAINT SHAREHOLDERS INTERNATIONAL HOLDINGS SPECIAL COMMITTEE MERGER SUB FINANCIAL STATEMENTS OBLIGATIONS COMMON STOCK CHIEF EXECUTIVE OFFICER SUCCESSORS AFFILIATES PUBLIC SHAREHOLDERS STIPULATION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
------------------y-_____II_____________ X
IN RE FOAMEX INTERNATIONAL INC. : CONSOLIDATED
SHAREHOLDERS LITIGATION : C.A. No. 16259-NC
-y----------------I--------------------- X L
SECOND AMENDED AND SUPPLEMENTAL CLASS
ACTION AND DERIVATIVE COMPLAINT
Plaintiffs, by their attorneys for their second amended
complaint against defendants, allege upon information and belief,
except for paragraph 4 hereof, which is alleged upon knowledge, as
follows:
1. Plaintiffs brings claims (a) pursuant to Rule 23 of the
Rules of the Court of Chancery on their behalf and as a class
action on behalf of all persons, other than defendants and those in
privity with them, who owned the common stock of Foamex
International Inc. ("Foamex" or the "Company") as of June 25, 1998,
and their successors in interest, and (b) derivatively on behalf of
Foamex, for damages in connection with the waste and breaches of
fiduciary duties by the directors of Foamex, described below.
SUMMARY OF ACTION
2. Defendant Marshall S. Cogan ("Cogan"), directly and
through defendant Trace International Holdings, Inc. ("Trace"), and
its subsidiaries and affiliates, dominates and controls Foamex, and
has exercised his control over Foamex for his personal benefit,
using Foamex as his personal "piggy bank." For example, and as set
forth in more detail below:
(a) Trace is currently in default to Foamex of
approximately $14 million in obligations, yet Foamex continued
to pay millions of dollars to Foamex for "management" services
and salaries Foamex does not even need.
(b) Cogan has awarded himself salary and bonuses
from Foamex over the last three years (and two years to come)
of at least $1 million a year, during periods when he held no
position at Foamex other than Chairman of the Board of
Directors (the "Board").
(c) Cogan has caused Foamex to subsidize numerous
Cogan-Trace activities, such as:
(i) lending almost $10 million to Trace;
(ii) renting and subleasing Manhattan commercial
real estate to Trace (with Trace subsequently
failing to repay $2.2 million in rent to
Foamex);
SNIPPETS:
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5
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COMPLAINT
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EXTRACTED KEY WORDS
DEFENDANTS FOAMEX MEMBERS TRACE TRANSACTION COMMON STOCK PRICE STOCKHOLDERS DIRECTORS BREACH LAW OFFICER CONTROVERSY SHAREHOLDERS DUTIES BUSINESS RELIEF DAMAGES CHANCERY TRACE INTERNATIONAL HOLDINGS COMPLAINT OUTSTANDING REASON JUDGEMENT ACT DUTY ADEQUATE SECURITY HOLDERS |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
--------------------------------------------------x
MIMONA CAPITAL, :
Plaintiff,
- against -
SALVATORE J. BONNANO, MARSHALL S. COGAN, CLASS,ACTION
ETIENNE DAVIGNON, ANDREA FARACE, ROBERT COMPLAINT.
J. HAY, STUART J. HERSHON, JOHN V. -._,
TUNNEY, FOAMEX INTERNATIONAL INC., and
TRACE INTERNATIONAL HOLDINGS, INC.,
Defendants. c-:
--
--------------------------------------------------x - `
Plaintiff, by its attorneys, Rosenthal, Monhait, Gross &
Goddess, P.A., for its complaint against defendants, alleges upon
information and belief, except for paragraph 2 hereof, which is
alleged upon knowledge, as follows:
1. Plaintiff brings this action pursuant to Rule 23 of
the Rules of the Court of Chancery on its behalf and as a class
action on behalf of all persons, other than defendants and those in
privity with them, who own the common stock of Foamex International
Inc. ("Foamex" or the "Company") .
2. Plaintiff has been the owner of the common stock of
the Company since prior to the transaction herein complained of and
continuously to date.
3. Foamex is a corporation duly organized and existing
SNIPPETS:
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6
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SETTLEMENT
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EXTRACTED KEY WORDS
FOAMEX STIPULATION COURT TRACE PARTIES DEFENDANTS ATTORNEYS COMMON STOCK PLAINTIFFS DELAWARE CORPORATION DIRECTORS COUNSEL MERGER CHANCERY LITIGATION INDIVIDUAL DEFENDANTS PROPOSED TRANSACTION REPRESENTATIVES SUBSIDIARIES OUTSTANDING COMMON STOCK GUTFREUND MERGER AGREEMENT EXHIBITS SPECIAL COMMITTEE EXPENSES PRINCIPAL EXECUTIVE OFFICES BUSINESS TRACE INTERNATIONAL HOLDINGS SALVATORE BONNANO |
IN THE CHANCERY COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY ; .., I
cc >
IN RE FOAMEX INTERNATIONAL INC. : C O N S O L I D A T E D
SHAREHOLDERS LITIGATION : C.A. NO. 16259NC -:
c _'t
m *
-
STIPULATION OF SETTLEMENT c.2
The parties to this action, by and through their
respective attorneys, have entered into this Stipulation of
Settlement (the l'Stipulation"), subject to the approval of the
Court of Chancery (the l'Court") :
WHEREAS,
A. Foamex International Inc. ("Foamex" or the
l'Company") is a Delaware corporation with its principal
executive offices in Linwood, Pennsylvania. Foamex is a
holding company which does not conduct any business of its
own.
B. Trace International Holdings, Inc. ("Trace") is
a Delaware corporation with its principal executive offices in
New York, New York. Trace is a holding company which does not
conduct any business of its own. As of March 16, 1998, Trace
and its subsidiaries beneficially owned approximately 46% of
the outstanding common stock of Foamex.
C. Salvatore Bonnano, Marshall S. Cogan, Etienne
Davignon, Andrea Farace, John H. Gutfreund, Robert J. Hay,
Stuart J. Hershon and John V. Tunney (collectively, the
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