IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
____________________-----------------~------------------------ X
JOHN W. BAILEY, >
i
Plaintiff,
1
-against-
;
PATRICK L. BEACH, W. ROSS MARTIN,
H. REID SHERARD, RICHARD J. PETERS, i
CREED L. FORD, III, WILLIAM H. KRUL, II, )
LEE C. HOWLEY, ALBERT T. ADAMS, >
WILLIAM J. CHADWICK, CAPTEC NET
LEASE REALTY ADVISORS, INC., CAPTEC i
FINANCIAL GROUP, INC., and CAPTEC
NET LEASE REALTY, INC. I
Defendants.
i
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CLASS ACTION COMPLAINT
Plaintiff, by his attorneys, alleges upon personal knowledge as to himself and his own
acts, and upon information and belief as to all other matters, as follows:
NATURE OF THE ACTION
1. This is a class action brought on behalf of the public shareholders of
Captec Net Lease Realty, Inc. ("Captec" or the "Company"), other than defendants and certain
affiliates of the defendants, against the defendants to enjoin the proposed special meeting to vote
upon, and any other steps to implement or close, a proposed merger (the "Merger") between the
Company and two companies controlled and owned by certain of the defendants. The Merger
has been unfairly timed to take advantage of the decline in the Company's stock, will
substantially and unfairly dilute the ownership interests of the public shareholders of Captec, and
SNIPPETS:
WILLIAM J. CHADWICK, CAPTEC NET
Plaintiff, by his attorneys, alleges upon personal knowledge as to himself and his own
This is a class action brought on behalf of the public shareholders of
Captec Net Lease Realty, Inc., other than defendants and certain
upon, and any other steps to implement or close, a proposed merger between the
substantially and unfairly dilute the ownership interests of the public shareholders of
fiduciary duty, as set forth in detail herein.
Captec's management and their affiliated entities.
in connection with their solicitation of shareholder votes to approve the
Merger at a special meeting of stockholders, the defendants have failed to disclose the true
to maximize shareholder value in a transaction which delivers effective control of the Company
Plaintiff John W. Bailey owns 4700 shares of common stock of Captec
Defendant Patrick Beach is the Chairman of the Board of
officer, and controlling shareholder of defendants Captec Net Lease Realty Advisors, Inc.
which provides most of Captec's management and advisory services relating to the
acquisition, development and leasing of Captec's properties, and Captec Financial Group, Inc.
Defendant W. Ross Martin is the Senior Vice President,
Sherard is also a principal officer,
various affiliates and customers of the Company.
Financial Group, and are its principal stockholders, officers and directors.
nature of the proposed merger and the parties thereto in seeking shareholder action with
Such triple-net leases generally impose upon the lessee
Corporation, had provided a warehouse credit facility to Financial Group, for which it
The Merger is subject to a vote of shareholders, at a special meeting to be
but have filed a Preliminary Proxy Statement on April 19,200O to be used
While the Company appointed a "special committee" of defendants other
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