3 More Shareholder Suits Filed Over New Frontier Takeover
BOULDER, Colo. — Three additional shareholder suits have been filed against New Frontier Media and LFP Broadcasting over the planned $33 million takeover of the adult transactional TV service.
Last week, XBIZ reported that one plaintiff, Craig Telke, launched a putative shareholder suit at federal court in Denver alleging that the acquisition of New Frontier Media by LFP Broadcasting is "grossly inadequate."
Telke's suit asks for an injunction over the proposed deal or rescinding it if the deal is consummated by its scheduled closing date of Nov. 27, as well as damages and attorneys fees. The suit seeks class-action status.
The three additional suits — two filed at Boulder County District Court and one at Denver County District Court — were filed by shareholder plaintiffs Elwood White, Dennis Palkon and Gopal Chakravarthy, both making the same allegations in their cases as Telke's suit and ask for class-action status. They also made the same injunctive demands.
Among the allegations in all four suits, New Frontier Media's board is alleged to have breached its fiduciary duties in connection with the LFP Broadcasting offer.
Last month, New Frontier Media announced that TV service had signed a definitive agreement to be acquired by LFP Broadcasting for $2.02 per common share in cash up front, or approximately $33 million, plus a contingent cash payment right for each common share.
Today, in a response to the three suits, New Frontier Media CFO Grant Williams said in a filing with regulators that the Boulder, Colo.-based company believes the suits lack merit and intend to contest them vigorously.