Legal journal confuses appraisal rights with class
The article below incorrectly reports that the petition filed earlier that
day for appraisal of Calamos Asset Management seeks a determination of
fair value for payment to all shareholders. The petition, like a
previously filed petition by another Calamos shareholder, states in
accordance with Delaware General Corporation Law § 262
that appraisal is sought only for the benefit of shareholders who have
made the required demand. For copies of the petitions, see
June 8, 2017, Fair Value Investments, Inc., v. Calamos Asset
Management, Inc. (C.A. No. 2017-436): Verified Petition for
Appraisal of Stock
(4 pages, 133 KB, in
February 22, 2017, The Mangrove Partners Master Fund, Ltd., v.
Calamos Asset Management, Inc. (C.A. No. 2017-0139): Verified
Petition for Appraisal of Stock
(4 pages, 16 KB, in
Law360, June 8. 2017 article
Calamos Investor Seeks Stock Appraisal After
Law360, Wilmington (June 8,
2017, 6:33 PM EDT) -- A shareholder of investment services firm
Calamos Asset Management Inc. filed a petition Thursday in Delaware
state court seeking appraisal of its stock in the company after the
firm's parent conducted a take-private transaction.
Fair Value Investments Inc. filed the petition asking the court to
determine a fair value for its 100 shares of stock in Calamos Asset
Management following the February deal that saw parent company Calamos
Partners LLC offer $8.25 per share for the subsidiary. Section 262 of the
Delaware General Corporation Law permits shareholders to demand appraisal
of their shares if they feel they were undervalued in a transaction.
“Petitioner has not accepted any consideration in connection with the
merger or the tender offer for any of petitioner’s shares, agreed to a
price to be paid for any of petitioner’s shares, or withdrawn its demand
for appraisal with respect to petitioner’s shares,” Fair Value wrote in
According to the petition, Fair Value made its initial appraisal demand to
Calamos Asset Management shortly after the merger and tender offer were
announced in January in compliance with the rules of Section 262.
The deal has drawn lawsuits in Delaware from other shareholders, with a
putative class action arising almost immediately following the
announcement of the acquisition in January. Shareholder Brian Lerman
alleges the deal is structurally coercive because founder John Calamos Sr.
and others own 97 percent of the subsidiary targeted for acquisition.
Since the deal does not include any provisions requiring the approval of a
majority of the minority shareholders, Lerman argued the transaction could
be foisted on the minority investors who have little to no recourse to
stop the deal.
Preclusive deal protections, including a $2.5 million termination fee due
to Calamos Partners if 15 percent of shareholders demand appraisal, also
hamper the rights of minority shareholders, that suit said.
The Lerman suit alleges that Calamos Partners concocted a scheme to
devalue Calamos Asset Management in the months before the tender offer was
made and the ultimate deal price of $8.25 per share undervalued the
Lerman sought to expedite his motion for a preliminary injunction to stop
the tender offer from closing when he filed his suit in January, but Vice
Chancellor J. Travis Laster denied that motion and allowed the transaction
to go through.
In the new appraisal action, Fair Value is asking the chancery court to
determine the fair value of its Class A common stock and the payment of
any difference in value not just to Fair Value, but to all holders of
Class A shares, along with legal costs and fees.
Representatives for Fair Value and Calamos Asset Management could not
immediately be reached late Thursday for comment.
Fair Value is represented by Edward M. McNally and Patricia A. Winston of
Morris James LLP.
Counsel information for Calamos Asset Management was not immediately
The case is Fair Value Investments Inc. v. Calamos Asset Management Inc.,
case number 2017-0436, in the
Delaware Chancery Court.
--Additional reporting by Cara Mannion. Editing by Emily Kokoll.
© 2017, Portfolio Media, Inc.