IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
ANTHONY KOLTON,
Plaintiff,
C.A. No. - -
V.
CROWN MEDIA HOLDINGS, INC.,
ROBERT A. HALAMI, JR., DAVID J.
EVANS, WILFORD V. BANE, JR., ARNOLD
L. CHAVKIN, ROBERT J. DRUTEN,
DONALD J. HALL, JR., IRVINE 0.
HOCKADAY, JR., DAVID B. KOFF, PETER
A. LUND, JOHN P. MASCOTTE, WILLIAM
M. HABER, HALLMARK CARDS, INC.,
HALLMARK ENTERTAINMENT
DISRIBUTION, LLC, AND HALLMARK
ENTERTAINMENT, INC.,
Defendants.
1. This is an action on behalf of the public stockholders of Crown Media
Holdings, Inc. ("Crown Media" or the "Company") seeking a remedy for breach.es of
fiduciary duty and self-dealing which have occurred, are occurring or will occur in
connection with a purchase of assets by the Company from affiliates of the
Company's controlling stockhold.er, Hallmark Cards, Inc. ("Hallmark"). In the
transaction, Hallmark is unloading film assets which it no longer wants to own
directly onto the Company on unfair terms, including a grossly excessive price.
1
SNIPPETS:
This is an action on behalf of the public stockholders of Crown Media
connection with a purchase of assets by the Company from affiliates of the
Company's controlling stockhold.er, Hallmark Cards, Inc..
directly onto the Company on unfair terms, including a grossly excessive price.
Plaintiff owns shares of class A common stock:
owned such shares at all relevant times.
Company has two classes of stock outstanding, class A common stock and class B
Hallmark Entertainment, Inc. is a wholly
Hahmark Entertainment Distribution, LLC
a party to the agreement with Crown Media to effectuate the asset sale.
chairman of the board of directors of Hallmark since 1996.
Arnold L. Chavkin is a director of Crown Media.
Hallmarks nominees to the board are defendants Halami, Evans,
The Film Asset Transaction
Hallmark formalized the decision to sell some or all of the film assets to Crown
management was then informed of the transaction.
Notwithstanding Hallmarks control over Crown Media, the committee
propose to purchase other films.
The committee appointed a "negotiating team" of Crown Media's
to determine and negotiate a purchase price with a focus on the number of Crown
herein and their affiliates.
the special committee appointed the general counsel of Crown
`The defendants are breaching their fiduciary duty of disclosure in
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