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IN RE FREDERICKS OF HOLLYWOOD Click to find out why . . .



Keywords & Phrases
CaseNo: C.A. No. 15,944, CourtName: KNIGHTSBRIDGE DEFENDANTS TO DISMISS THE COMPLAINT UNDER COURT OF CHANCERY, State: DE Delaware, UniqueCaseRef: DE>CC>00015944, CourtCode: CC, County: New Castle County, Knightsbridge, Shareholders, Del, Complaint, Stock, Veritas, Agreement, Directors, Dilutive Option, Delaware, Merger, Dismiss, Motion, Duty, Transaction, Poison Pill, Trusts, Supr, Fiduciary Duty, Milton, Disclosure, Purchase Agreement, Knightsbridge Capital Corporation, Adopt, Facts, Loyalty, Parties, Royalty Corporation, Charter Provision, Support, Acquisition, Reasonableness, Breach, Stock Purchase Agreement, Exculpatory Charter Provision, Stockholders, Hunter, Stockholder , ContentID: 120239807

Case Documents
1 1999-08-19 REPLY BRIEF IN SUPPORT OF DEFENDANTS MOTION TO DISMISS
[ see first page and extracted highlights below  ] ItemID: 103246
19 pages
PDF
2 1999-07-09 MEMORANDUM OPINION
[ see first page and extracted highlights below  ] ItemID: 100434
15 pages
PDF
3 1999-05-04 PLAINTIFFS BRIEF IN OPPOSITION TO MOTIONS TO DISMISS
[ see first page and extracted highlights below  ] ItemID: 103247
47 pages
PDF
4 1999-03-05 BRIEF
[ see first page and extracted highlights below  ] ItemID: 103248
9 pages
PDF
5 1999-02-16 BRIEF
[ see first page and extracted highlights below  ] ItemID: 103249
27 pages
PDF
Total Documents: 5 documents , 117 pages
Price: $ 39.95


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1 . REPLY BRIEF IN SUPPORT OF DEFENDANTS MOTION TO DISMISS

EXTRACTED KEY WORDS
COURT
COMPLAINT
DIRECTORS
DUTY
DELAWARE
POISON PILL
DEL
PLAINTIFFS
MOTION
DISMISS
DEFENDANTS
ADOPT
DISCLOSURE
FACTS
LOYALTY
CHARTER PROVISION
SHAREHOLDERS
KNIGHTSBRIDGE
STOCKHOLDER
INCORPORATION
ALLEGE FACTS SUFFICIENT
CERTIFICATE
LIABILITY
TRANSACTION
ALLEGATIONS
EXCULPATORY CHARTER PROVISION
CONTROLLING STOCKHOLDER
FIDUCIARY DUTY
MAJORITY
           IN THE COURT OF CHANCERY OF THE !3TATE OF DELAWARE

                     IN AND FOR NEW CASTLE COUNTY



In rc FREDERICK'S OF HOLLYWOOD,        >
INC. SHAREHOLDERS LITIGATION           )  Consol. C.A. No. 15944
                                       >






                                                                     .
                       REPLY BRIEF IN SUPPORT 0F
                    DEFENDANTS' MOTION TO DISMISS
                                                     -                    `,








                                   MORRIS, NICHOLS, ARSHT  &  TUNNELL
                                   A. Gilchrist Sparks, III
                                   Jon E. Abramczyk
                                   Jeffrey R. Walters
                                   1201 N. Market IStreet
                                   P.O. Box 1347
                                   Wilmington, DE 19899
                                   (302) 658-9200
                                    Attorneys for Dlefendants
                                    George W. Townson, Richard 0.
                                    Starbird, William J. Barrett,
                                    and Merle A. Johnston


August 19, 1999



                                    TABLE OF CONTENTS


                                                                                              Palie
SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE!3TATE OF DELAWARE
  • DEFENDANTS' MOTION TO DISMISS
  • ADOPT A POISON PILL OR ISSUE A DILUTIVE OPTION.
  • The Frederick's Board Had No Duty To Issue A Dilutive Option.
  • INCORPORATION SHIELDS THE FREDERICK'S BOARD
  • FROM LIABILITY.
  • The Court May Consider The Exculpatory Charter Provision
  • The Amended Complaint Does Not Allege Facts Sufficient
  • To Question The Good Faith Or Loyalty Of The Frederick's
  • Arnold v. Society for Savings Bancorp, Inc., Del.
  • In re Formica Corp. Shareholders' Litigation,
  • Plaintiffs attempt to avoid dismissal of this action by ignoring the key facts
  • period in which the Frederick's Board was considering a sale of the Company, nearly a majority
  • board from interfering with the rights of a controlling stockholder to deal with its shares
  • interfered with the rights of the Trusts to sell their shares in an arms-length transaction to
  • Knightsbridge, and no allegations to justify diluting Knightsbridge's position once it had
  • that the Frederick's Board breached a fiduciary duty by failing to adopt a rights plan fails
  • Plaintiffs' disclosure claims also fail as a matter of law.
  • director defendants are shielded from liability by the provision in Frederick's certificate of
  • Plaintiffs' theory of liability in this case "is that Frederick's directors failed

  • 2 . MEMORANDUM OPINION

    EXTRACTED KEY WORDS
    PLAINTIFFS
    DEFENDANTS
    SHAREHOLDERS
    KNIGHTSBRIDGE CAPITAL CORPORATION
    DELAWARE
    VERITAS
    LAW
    COMPLAINT
    FIDUCIARY DUTY
    ROYALTY CORPORATION
    BREACH
    STOCK
    MERGER AGREEMENT
    AIDING
    ABETTING
    WILMINGTON
    ATTORNEYS
    NEGOTIATIONS
    EXPECTANCY
    INTERFERENCE
    LLP
    DEFENDANTS ROYALTY ACQUISITION
    BUSINESS RELATIONS
    PURCHASE
    VALID BUSINESS
    DEFENDANTS ARGUE
    FIDUCIARY DUTIES
    MAJORITY SHAREHOLDER
    HOLLYWOOD
    
                            IN AND FOR NEW CASTLE COUNTY
    
    
    In Re FREDERICK'S OF HOLLYWOOD, INC.                  )      CONSOLIDATED
    SHAREHOLDERS LITIGATION                               >      C.A. No. 15944
    
    
    
                                 MEMORANDUM OPINION
    
                           Date Submitted:           May 27,1998
                           Date Decided:              July 9. 1998
    
    
    
    Norman M. Monhait, Esquire, of ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.,
    Wilmington, Delaware; and GOODKIND, LABATON, RUDOFF & SUCHAROW LLP, and
    LAW OFFICES OF JEFFREY S. ABRAHAM, New York, New York; LOWEY,
    DANNENBERG, BEMPORAD & SELINGER, P.C., White Plains, New York; HANZMAN,
    CRIDEN, KORGE, CHAYKIN, PONCE & HEISE, P.A., Miami, Florida; SCHUBERT &
    REED, LLP, San Francisco, California; and COHN, LIFLAND, PEARLMAN,
    HERRMANN & KNOPK, Saddle Brook, New Jersey; Attorneys for Shareholder Plaintiffs
    
    William D. Johnston and John W. Shaw, Esquires, of YOUNG, CONAWAY, STARGATT
    & TAYLOR, LLP, Wilmington, Delaware; and Suzanne L. Saxman and Peter Petrakis of
    D'ANCONA  & PFLAUM, Chicago, Illinois; Attorneys for Defendants Royalty Acquisition
    Corp., Royalty Corporation, Knightsbridge Capital Corporation and Frederick's of
    Hollywood, Inc.
    
    A. Gilchrist Sparks, III, William M. Lafferty, and Jon E. Abramczyk, Esquires, of MORRIS,
    NICHOLS, ARSHT  & TIJNNELL, Wilmington, Delaware; Attorneys for Defendants
    George W. Townson, Richard 0. Starbird, William J. Barrett and Merle A. Johnston
    
    Stephen E. Jenkins, Esquire of ASHBY & GEDDES, Wilmington, Delaware; Attorneys for
    Defendant Hugh V. Hunter
    
    
    
    JACOBS, VICE CHANCELLOR
    
    
    
    Y           P&in-t3  i-.a_ a motion by the Z&nd?nts Royalty ALc$aition Corp., Roy&y
    
         Corporation, and Knightsbridge Capital Corporation ("Knightsbridge" or the
    
         `Knightsbridge defendants")' to dismiss the complaint under Court of Chancery
    
         Rule 12(b)(6) for failure to state a claim upon which relief can be granted. On
    
    SNIPPETS:
  • Norman M. Monhait, Esquire, of ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A., Wilmington, ntiffs
  • William D. Johnston and John W. Shaw, Esquires, of YOUNG, CONAWAY, STARGATT & TAYLOR, LLP,
  • and Knightsbridge Capital Corporation ("Knightsbridge" or the
  • `Knightsbridge defendants")' to dismiss the complaint under Court of Chancery
  • October 29, 1997, the plaintiffs, who are shareholders of Frederick's of
  • Hollywood, served and filed an amended class action complaint
  • "aided and abetted" the individual director defendants' breach of their fiduciary
  • and for having "tortiously interfered" with the Frederick's shareholders'
  • opportunity to obtain a higher price for their stock.
  • `Royalty Acq uisition Corp. is a Delaware corporation and a wholly owned subsidiary of
  • Knightsbridge would purchase all of Frederick's outstanding shares for $6.14 cash
  • merger agreement with Knightsbridge in favor of another bidder's offer.
  • share cash.3 Veritas emphasized that its "offer" was not binding,
  • would cease all current negotiations with all other bidders,
  • necessary to discharge the board's fiduciary duties, the Frederick's board, if it
  • does the amended complaint state a valid claim for aiding and abetting a breach
  • tortious interference with prospective contractual relations?
  • The defendants argue that the complaint fails to state a cognizable aiding
  • fiduciary duty, and have not alleged facts that would establish actual
  • would appear to be contrary to Delaware law.
  • the existence of a valid business relation or expectancy, the interferer's knowledge of the
  • The issues, therefore, become whether the plaintiffs had a valid business relation
  • a majority shareholder is not obligated to vote its shares in favor of a transaction that it
  • claim for tortious interference with prospective business relations.

  • 3 . PLAINTIFFS BRIEF IN OPPOSITION TO MOTIONS TO DISMISS

    EXTRACTED KEY WORDS
    VERITAS
    COURT
    COMPLAINT
    DEFENDANTS
    DEL
    STOCK
    TRUSTS
    AGREEMENT
    MERGER
    SHAREHOLDERS
    SUPR
    COUNSEL
    PARTIES
    DIRECTORS
    TRANSACTION
    PLAINTIFFS
    REASONABLENESS
    INDIVIDUAL DEFENDANTS
    REPRESENTATIVES
    STOCK PURCHASE AGREEMENT
    ACQUISITION
    LAW OFFICES
    CSS
    WHITE PLAINS
    DILUTIVE OPTION
    STOCKHOLDERS
    ROYALTY CORPORATION
    RIGHTS PLAN
    PATHE COMMUNICATIONS
    
             IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                            IN AND FOR NEW CASTLE COUNTY
    
    
    
    
    IN RE FREDERICK'S OF HOLLYWOOD, INC.                   1       CONSOLIDATED
    SHAREHOLDERS LITIGATION                                        C.A. No. 15944
    
    
    
                              PLAINTIFFS' BRIEF IN OPPOSITION                                          
                          TO DEFENDANTS' MOTIONS TO  DISMISSg                                          
                                                                        ,. -, ,,/ i                    
                                                                        i `1                           
                                                                         `/                            
                                                                                       .1,             
                                                                                                       
                                                                                                       
                                                                                              ,:       
                                     ROSENTHAL  MONHAIT GROSS  &`.GOD&S,P.A.
                                     Suite 1401, Mellon Bank Center  `,   .`li,                        
                                     P.O. Box 1070                                     c- ,.A?         
                                     Wilmington, DE 19899-1070                                      -d
                                     (302) 656-4433
                                       Attorneys for Plainfiffs
    OF COUNSEL:
    
    GOODKIND LABATON RUDOFF                         HANZMAN  CRIDEN KORGE CHAYKIN
      & SUCHAROW LLP                                   PONCE & HEISE, P.A.
    100 Park Avenue                                200  S. Biscayne Blvd., Suite 2100
    New York, NY 10017                             Miami, FL 33131
    
    LOWEY DANNENBERG BEMPORAD                      SCHUBERT & REED LLP
      & SELINGER, P.C.                             Two Embarcadero Center
    The Gateway                                    Suite 1050
    One North Lexington Avenue                     San Francisco, CA 94111
    White Plains, NY 10601
    
    LAW OFFICES OF JEFFREY S. ABRAHAM COHN LIFLAND  PEARLMAN
    60 E. 42nd Street                                  HERRMANN  & KNOPF
    Suite 1700                                     Park 80 Plaza West One
    New York, NY 10165                             Saddle Brook, NJ 07662
    
    
    May 4, 1999
    
    
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • OF COUNSEL:
  • White Plains, NY 10601
  • LAW OFFICES OF JEFFREY S. ABRAHAM COHN LIFLAND PEARLMAN
  • Parties.
  • The $6.14 Knightsbridge Offer
  • Knightsbridge's Acquisition Of The Trusts'
  • The Dilutive Option And Veritas Agreement
  • The False And Misleading CSS
  • CLAIMS AGAINST THE INDIVIDUAL DEFENDANTS
  • A COMPLAINT, GIVING THE PLAINTIFFS THE BENEFIT
  • CLAIM THAT FREDERICK'S DIRECTORS' CONDUCT OF
  • BEST TRANSACTION AVAILABLE
  • Arnold v. Societv For Savings Bancorp, Inc., Del.
  • Supr., 650 A.2d 1270.
  • BBC Acquisition Corp. v. Durr-Fillauer Medical, Inc., Del.
  • In Re Hollv Farms Corporation Shareholders Litiaation,

  • 4 . BRIEF

    EXTRACTED KEY WORDS
    HUNTER
    DISMISS
    MOTION
    COURT
    SHAREHOLDERS
    JUDGEMENT
    COMPLAINT
    DEL
    DEFENDANTS
    PLEADINGS
    RESIGNATION
    KNIGHTSBRIDGE
    OPENING
    SUPR
    SUPPORT
    HUGH
    STOCK
    DIRECTORS
    BIDDER
    CHANCERY COURT
    SHAREHOLDERS LITIGATION
    WILMINGTON
    AMENDED COMPLAINT
    MERGER
    BREACH
    PRICE
    STOCK PURCHASE AGREEMENT
    DISCLOSURE
    NEGOTIATION
    
                IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                            IN AND FOR NEW CASTLE COUNTY
    
    
    
    IN RE FREDERICK'S OF HOLLYWOOD, INC.    ) Consolidated
    SHAREHOLDER LITIGATION                  )    Civil Action No. 15944NC
    
    
    
    
    
                            OPENING BRIEF IN SUPPORT OF
                  DEFENDANT HUGH V. HUNTER'S MOTION TO DISMISS  ;  : ; ::,
                    AND MOTION FOR JUDGMENT ON THE PLEADINGS                 2  .;  :~-,,'
    
    
    
    
    
    
    
                                                   ASHBY & GEDDES
                                                   Stephen E. Jenkins
                                                   Regina A. Iorii
                                                   One Rodney Square
                                                   P.O. Box 1150
                                                   Wilmington, DE 19899
                                                   (302) 654-1888
    
                                                   Attorneys for Hugh V. Hunter
    Dated: March 5, 1999
    61925.1
    
    
    
                                                                                                       
    
    
    
    TABLE OF CITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...* . . . . . .
    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
    
    NATURE AND STAGE OF THE PROCEEDINGS s..... . . . . . . . . . . . . . . ..a.. . . . . . . . . .
    
    STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . ..*........... . . . . . . . . . . .
    . . . . . . . . . . . . . . . . . . . . . . . . . . 2
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • AND MOTION FOR JUDGMENT ON THE PLEADINGS
  • Wilmington, DE 19899
  • Attorneys for Hugh V. Hunter Dated:
  • THE COURT SHOULD DISMISS THE CLAIMS AGAINST
  • MR. HUNTER, OR, ALTERNATIVELY, GRANT JUDGMENT
  • ON THE PLEADINGS TO MR. HUNTER ON ALL CLAIMS
  • THE AMENDED COMPLAINT SHOULD BE DISMISSED.
  • Supr., 624 A.2d 1199.
  • In re Santa Fe Pacific Corp. Shareholders Litigation, Del.
  • In September 1997, plaintiffs filed this action, solely to enjoin the merger of Knightsbridge
  • On September 29, 1997, after briefing and argument, the Chancery Court denied
  • On October 27, 1997, the plaintiffs filed the present consolidated class action complaint.
  • Frederick's directors' breach of fiduciary duty, and tortiously interfering with the
  • shareholders' opportunity to obtain a higher price for their stock from a competing bidder.
  • Knightsbridge defendants' motion.
  • Defendants Townson, Star-bird, Barrett and Johnston filed their opening brief in support of
  • Supplement to Stock Purchase Agreement,
  • believes that the other directors clearly acted properly after his resignation, even if they
  • We also know, however, that that did not happen here, since the facts show that the Trusts
  • board had used a much sharper-elbow approach to the negotiation it might have achieved a

  • 5 . BRIEF

    EXTRACTED KEY WORDS
    STOCK
    DEL
    SHAREHOLDERS
    KNIGHTSBRIDGE
    PLAINTIFFS
    MILTON
    PURCHASE AGREEMENT
    VERITAS
    MERGER
    DELAWARE
    DEFENDANTS
    SUPPORT
    MOTION
    DISMISS
    SHAREHOLDERS LITIQ
    DILUTIVE OPTION
    BLOMMER CHOCOLATE
    TRANSACTION
    FIDUCIARY DUTY
    COMPLAINT
    DIRECTORS
    ABSOLUTE MAJORITY
    STOCKHOLDERS
    HOLLYWOOD
    EXCULPATORY CHARTER PROVISION
    JMS
    ACQUISITION
    NEGOTIATIONS
    TERMINATION FEE
    
           IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    
                         IN AND FOR NEW CASTLE COUNTY
    
    
    In re FREDERICK'S OF HOLLYWOOD, )
    INC. SHAREHOLDERS LITIGATION         ) Consol. C.A. No. 15944
                                         )
    
    
    
    
    
    
                         OPENING BRIEF IN SUPPORT OF
                         DEFENDANTS' MOTION TO DISMISS
    
    
    
    
    
    
    
                                       MORRIS, NICHOLS, ARSHT b TUNNELL
                                       A. Gilchrist Sparks, III
                                       Jon E. Abramczyk
                                       Jeffrey R. Wolters
                                       1201 N. Market Street
                                       P.O. Box 1347
                                       Wilmington, DE      19899
                                       (302) 658-9200
                                         Attorneys for Defendants
                                         George W. Townson, Richard 0.
                                         Starbird, William J. Barrett,
                                         and Merle A. Johnston
    
    
    February 16, 1999
    
    
    
                                                                                 i.
    
                                 TABLE OF CONTENTS
    
                                                                               Page
    
    TABLE OF CITATIONS                                                           ii
    
    
    SNIPPETS:
  • IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
  • OPENING BRIEF IN SUPPORT OF
  • DEFENDANTS' MOTION TO DISMISS
  • The Milton Offer and Knightsbridge's Initial
  • Plaintiffs Cannot Show That The Frederick's
  • In re Baxter Int'l Shareholders Litiq.,
  • In re Frederick's of Hollywood, Inc., Del.
  • This consolidated class action attacks the acquisition
  • "Company") by an acquisition vehicle organized by Knightsbridge
  • Knightsbridge because the amended complaint (filed after
  • consummation of the merger) "plainly alleges that the
  • negotiations were
  • issue a dilutive option to frustrate the Knightsbridge bid.
  • their motion to dismiss the breach of fiduciary duty claims
  • Frederick's Board of Directors
  • the original merger agreement with Knightsbridge was approved
  • JMS as its investment banker and agreed to pay JMS a fee based
  • the best interests of the Company's stockholders for the Board
  • Company's Class A and Class B stock would receive $6.14 per
  • Initial Stock Purchase Agreement With
  • shares for the Knightsbridge merger and against a transaction
  • Veritas And Milton
  • million (in part to cover the termination fee and additional
  • Knightsbridge's newly-acquired control of an absolute majority
  • Blommer Chocolate Co. v. Blommer,
  • Frederick's Exculpatory Charter Provision Mandates Dismissal of the Amended
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