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1
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LETTER OPINION
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EXTRACTED KEY WORDS
COURT DIRECTORS BUSINESS PLAINTIFF FRANKINO ELECTION MODIFY DEFENDANTS OPERATING DODERO LITIGATION ORDINARY COURSE AGREEMENT REASONS PARAGRAPH EXERCISE CONTROL MEETING INCUMBENT EMPLOYEE CHANCERY SUBSIDIARIES ROUTINE PARTIES CONSULTANT WILLIAM COUNSEL ANNUAL STOCKHOLDERS RICE DISPUTES |
C OURT OF C H A N C E R Y
OF THE
S TATE OF D E L A W A R E
WICLIAM 8. CH A N D L E R I I I T H E
CHANCELLOR September 28, 1999
G E O R
VIA FAX & U.S. MAIL
William M. Lafferty
Morris, Nichols, Arsht & Tunnel1
P.O. Box 1347
Wilmington, DE 19899
Edward M. McNally
Morris, James, Hitchens & Williams
P.O. Box 2306
Wilmington, DE 19899
Re: Frankino v. National Auto Credit, Inc.
Civil Action Nos. 17208 & 17209
Frankino v. Gleason
Civil Action No. 17399
Dear Counsel:
Having considered the arguments set forth in your letters to the
well as during our telephone conference on September 24*, I grant plaintiffs
motion to modify the status quo order. A copy of the modified status quo order is
attached to this letter for your records.
Unfortunately, the press of other business before the Court impinges
my ability to provide counsel with a detailed explanation of the reasons for this
decision. What follows is an abbreviated version of my rationale.
SNIPPETS:
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2
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LETTER TO CHANCELLOR CHANDLER
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EXTRACTED KEY WORDS
COURT DIRECTORS DEFENDANTS ELECTION ANNUAL MEETING WILLIAM FRANKINO MARSHALL GLEASON MOTION BUSINESS PLAINTIFF SEATS PARAGRAPH CHANDLER MODIFY NOMINEES HONORABLE WILLIAM CHANCERY VOTE NOMINATIONS CERTIFICATE COUNSEL ORDINARY COURSE ESQUIRE RICE OPERATING DELAWARE AGREEMENT |
M ORRIS , N ICHOLS , A RSHT & TUNNELL
I 201 N O R T H M A R K E T S T R E E T
P.O. B o x 1 3 4 7
W I L M I N G T O N , D E L A W A R E 19899-l 3 4 7
T ELEPHONE i302) 658-9200
T ELECOPY 1302) 658-3989
(302)575-7341
September 2 1, 1999
R ANDREW
DAVID A.
WALTER
VIA FACSIMILE
The Honorable William B. Chandler III
Chancellor
Court of Chancery
Family Court Building
The Circle
Georgetown, DE 19947
Re: Frankino v. National Auto Credit, Inc., C.A. N
Dear Chancellor Chandler:
This letter is respectfully submitted in support of plaintiff Sam J. Frankino's
motion to modify the Stipulated Order Maintaining Status Quo ("Status Quo Order") entered by
the Court on September 3, 1999 in C.A. No. 17399-NC (the "Section 225 Action").
As Your Honor no doubt recalls, on September 8, 1999, National Auto Credit,
Inc. ("NAC" or the "Company") filed a motion to postpone the Company's 1999 annual
stockholders' meeting ("Annual Meeting") that was ordered previously by the Court in C. A.
SNIPPETS:
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3
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LETTER OPINION
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EXTRACTED KEY WORDS
NAC STOCKHOLDERS COURT AUDITORS POSTPONEMENT WILLIAM MORRIS WILMINGTON COUNSEL ELECTION GRANT THORNTON BUSINESS REQUESTS UPCOMING SHAREHOLDER MEETING BUSINESS MEDIA EXTREMELY LIMITED RECORD APPRISE STOCKHOLDERS NAC ARGUES ATTENTION KIND FORCE VACUUM UNHAPPY EMPHASIZE RECOGNITION STANDSTILL ORDER DELAWARE LAW REGISTER CHANCERY |
C OURT OF C HANCERY
OF THE
STATE OF D ELAWARE
WILLIAM B. C HANDLER III T HE F AMILY
C H A N C E L L O R September 9, 1999 P.0.
GEORGETOWN , D
VIA FAX & U.S. MAIL
William M. Lafferty
Morris, Nichols, Arsht & Tunnel1
P.O. Box 1347
Wilmington, DE 19899
Edward M. McNally
Morris, James, Hitchens & Williams
P.O. Box 2306
Wilmington, DE 19899
Re: Frankino v. National Auto Gedit, Inc.
Civil Action Nos. 1720&l 7209
Dear Counsel:
I deny National Auto Credit, Inc.`s ("NAY) motion to postpone the
September 15, 1999 stockholder meeting. The September 15 meeting was
agreed to by counsel (and ordered by the Court) in order to resolve plaintiff
Frankino's Section 211 Action, an action brought because NAC had not had
a stockholder's meeting for over two years.
NAC's request to postpone the September 15 meeting is based on its
contention that the stockholders need to be informed about Mr. Frankino's
Section 225 Action, his purported expansion and election of new members
to the NAC board and the possibility that NAC's outside, independent
auditors (Grant Thornton) may not continue as NAC's auditors in the event
of a change of control of NAC. Mr. Frankino claims to own about 55% of
NAC stock. The election of two new directors and approval of Grant
Thornton as NAC's auditors therefore is not likely to be affected even if
additional information about Mr. Frankino's Section 225 Action is provided
to NAC's stockholders. But I decline NAC's invitation to postpone the
September 15 meeting because I am not persuaded that the circumstances in
this case justify a postponement. The meeting has been scheduled since late
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4
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MOTION TO POSTPONE ANNUAL MEETING
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EXTRACTED KEY WORDS
STOCKHOLDERS COURT NAC FRANKINO POSTPONE DIRECTORS PLAINTIFF CONSENT ELECTION DEL NATIONAL AUTO CREDIT MEMBERS CONTROL PRIOR MOTION COURT RULES MAJORITY RESPECTFULLY REQUESTS AUDITOR RESIGNATION SPECIAL COMMITTEE VOTE DISPUTE STIPULATION RESOLVING EXERCISE MINORITY DISCLOSURES CHAIRMAN |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
SAM J. FRANKINO, >>
Plaintiff, >> C.A. No. 17208NC Q,"
V. >
>
NATIONAL AUTO CREDIT, INC., a )
Delaware corporation, >>
Defendant, )
SAM J, FRANKINO, --+>
Plaintiff, )
> C.A. No. 17209-NC
V. >
>
NATIONAL, AUTO CREDIT, INC., a )
Delaware corporation, >>
Defendant, )
NOTICE OF MOTION
TO: William M. Lafferty (#2755)
Morris, Nichols, Arsht & Tunnel1
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899
PLE.ASE TAKE NOTICE that the attached Motion to Postpone The Annual Meeting of
the Stockholders of National Auto Credit, Inc., will be presented to the Court at a time to be set
by the Court
MORRIS, JAMES, HITCHENS & WILLIAMS
DATE: September 8, 1999
222 Delaware Avenue - 10th Fl.
P. 0. Box 2306
Wilmington, DE 19899
302/888-6800
Attorneys for Defendant, National Auto Credit. Inc.
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY .
SAM J. FRANKINO, >>
SNIPPETS:
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