Gottlieb v. Willis et al
Filing
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ORDER - Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT plaintiff's motion for a preliminary injunction 4 is DENIED. LET JUDGMENT BE ENTERED ACCORDINGLY.(Written Opinion). Signed by Judge Patrick J. Schiltz on 11/07/12. (bjs)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
HELENE GOTTLIEB, individually and on
behalf of all others similarly situated,
Case No. 12-CV-2637 (PJS/JSM)
Plaintiff,
ORDER
v.
RICHARD S. WILLIS; BRADLEY J.
SHISLER; KATHLEEN P. IVERSON;
DAVID F. DALVEY; FREDERICK C.
GREEN IV; KEITH A. BENSON;
TIMOTHY R. GENTZ; TOM F. WEYL;
NAVARRE CORPORATION; SFC
ACQUISITION CO., INC.; and SPEEDFC,
INC.
Defendants.
William Scott Holleman and Shannon L. Hopkins, LEVI & KORSINSKY, LLP; Karen
H. Riebel and Gregg M. Fishbein, LOCKRIDGE GRINDAL NAUEN P.L.L.P., for
plaintiff.
Peter W. Carter and Michelle S. Grant, DORSEY & WHITNEY LLP, for defendants
Richard S. Willis, Bradley J. Shisler, Kathleen P. Iverson, David F. Dalvey, Frederick C.
Green IV, Keith A. Benson, Timothy R. Gentz, Tom F. Weyl, Navarre Corporation, and
SFC Acquisition Co., Inc.
Bret A. Puls and Marie L. Van Uitert, OPPENHEIMER WOLFF & DONNELLY LLP,
for defendant SpeedFC, Inc.
Plaintiff Helene Gottlieb is a shareholder of defendant Navarre Corporation (“Navarre”).
Navarre recently announced that it has entered into a merger agreement with defendant SpeedFC,
Inc. (“SpeedFC”), pursuant to which SpeedFC will be merged into Navarre’s wholly owned
subsidiary, defendant SFC Acquisition Co., Inc. Gottlieb alleges that, in connection with this
proposed transaction, the individual members of Navarre’s board of directors breached their
fiduciary duty to disclose material information to shareholders and, along with Navarre, violated
§ 14(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(a). Gottlieb further contends
that SpeedFC and SFC Acquisition Co., Inc. aided and abetted the individual defendants’
breaches of fiduciary duty. Gottlieb brings her fiduciary-duty claims on behalf of a putative class
of Navarre shareholders. Compl. ¶ 1.
This matter is before the Court on Gottlieb’s motion for a preliminary injunction.
Gottlieb asks the Court to enjoin the proposed merger until defendants disclose additional
information to shareholders. Gottlieb’s motion is denied for the reasons explained below.
I. BACKGROUND
Navarre is a Minnesota corporation that provides services to retailers and manufacturers,
including retail-distribution programs, e-commerce fulfillment, and third-party logistics services.
Compl. ¶¶ 14, 32. Navarre is publicly traded on the NASDAQ stock market and, as of
September 24, 2012, had 37,193,454 shares of common stock outstanding. Compl. ¶ 32. The
individual defendants are all members of Navarre’s board of directors; defendant Richard Willis
is also Navarre’s president and CEO. Compl. ¶¶ 15-22.
SpeedFC, which was founded in 2000, is a privately owned Delaware corporation that is
headquartered in Texas. Compl. ¶¶ 24, 33. SpeedFC is a provider of e-commerce services to
online retailers and manufacturers. Compl. ¶ 33. Jeffrey Zisk is SpeedFC’s CEO and controlling
stockholder; he owns approximately 59.4 percent of the fully diluted voting power of SpeedFC.
Compl. ¶ 33.
On September 27, 2012, Navarre and SpeedFC announced an agreement through which
Navarre will acquire SpeedFC for a total initial consideration of $50 million, as well as
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additional consideration that is contingent on SpeedFC’s achievement of certain performance
goals. Compl. ¶ 34. The initial consideration consists of $25 million in cash and 17,095,186
shares of Navarre common stock valued at a total of $25 million. Compl. ¶ 35. If SpeedFC
achieves certain performance levels in 2012, SpeedFC’s equity holders will receive additional
cash and shares of Navarre stock. Compl. ¶¶ 36-37. After the transaction closes, Zisk will
become a member of Navarre’s board of directors and the president of the surviving subsidiary
corporation. Compl. ¶ 40; Hopkins Decl. Ex. A at 28. Before entering into the agreement,
Navarre obtained an opinion from Roth Capital Partners, LLP (“Roth”) that the consideration
that Navarre will pay is fair to Navarre. Hopkins Decl. Ex. A at 20.
On October 10, 2012, Navarre filed a Schedule 14A proxy statement with the Securities
and Exchange Commission (“SEC”). Compl. ¶ 7. In the proxy statement, Navarre’s board of
directors seeks the approval of Navarre’s shareholders to issue the shares necessary to acquire
SpeedFC. Compl. ¶ 7. This approval is necessary under NASDAQ’s rules and is a condition to
the consummation of the transaction. Compl. ¶ 7. The shareholder vote is to occur at Navarre’s
annual shareholder meeting, which was originally scheduled for November 8, 2012, Compl. ¶ 7;
recently, however, that meeting was postponed until November 20, 2012.1
1
At oral argument on Gottlieb’s motion, the parties informed the Court that the merger
agreement had been amended and that, because of the amendment (and because of the recent
hurricane on the East Coast), the shareholder meeting was being postponed. Navarre later
informed the Court that the shareholder meeting will be held on November 20. ECF No. 21.
Navarre also provided a link to the proxy statement supplement that it filed with the SEC on
November 2 concerning the amended agreement. ECF No. 21.
The supplement explains that the contingent consideration has been amended to decrease
the cash component to $5 million (from the original $10 million) and increase the stock
component to 6,287,368 shares (from the original 3,333,333 shares). The supplement also
explains that Roth has opined that this amended consideration is fair to Navarre. Neither party
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Gottlieb alleges that the proxy statement fails to disclose material information necessary
for Navarre’s shareholders to make an informed decision about whether to approve the issuance
of shares necessary for the merger. Compl. ¶ 8. Broadly speaking, Gottlieb alleges that the
proxy statement is deficient in three areas: (1) it fails to disclose certain financial information,
including the companies’ financial forecasts, the amount of cost savings and other synergies that
are expected to be realized from the merger, and details concerning Roth’s analysis of the
transaction; (2) it fails to disclose certain details concerning Roth’s conflict of interest; and (3) it
fails to disclose the strategic alternatives that Navarre considered. Compl. ¶ 8.
Gottlieb filed this action on October 16, 2012 and, about a week later, filed a motion to
preliminarily enjoin the transaction until defendants make a full disclosure to Navarre’s
shareholders. The Court held oral argument on the motion on November 1, 2012.
II. ANALYSIS
A. Standard of Review
A court must consider four factors in deciding whether to grant a preliminary injunction:
(1) the movant’s likelihood of success on the merits; (2) the threat of irreparable harm to the
movant if the injunction is not granted; (3) the balance between this harm and the injury that
granting the injunction will inflict on the other parties; and (4) the public interest. Dataphase
Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981). Preliminary injunctions are
extraordinary remedies, and the party seeking such relief bears the burden of establishing her
entitlement to an injunction under the Dataphase factors. Watkins Inc. v. Lewis, 346 F.3d 841,
has contended that this new information affects the Court’s consideration of Gottlieb’s motion,
and the Court therefore has not considered it in its analysis.
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844 (8th Cir. 2003). If a party’s likelihood of succeeding on the merits is sufficiently low, a court
may deny a preliminary injunction even if the other three factors — irreparable harm, balance of
harms, and the public interest — weigh in the party’s favor. See CDI Energy Servs., Inc. v. W.
River Pumps, Inc., 567 F.3d 398, 402 (8th Cir. 2009) (“the absence of a likelihood of success on
the merits strongly suggests that preliminary injunctive relief should be denied”); Mid-America
Real Estate Co. v. Iowa Realty Co., 406 F.3d 969, 972 (8th Cir. 2005) (“an injunction cannot
issue if there is no chance of success on the merits”).
B. Likelihood of Success
1. Section 14(a)
Section 14(a) of the Securities Exchange Act, 15 U.S.C. § 78n(a), makes it unlawful to
solicit a proxy in violation of SEC rules. Gottlieb alleges that the Navarre proxy statement
violates Rule 14a-9, 17 C.F.R. § 240.14a-9, which states, in relevant part:
No solicitation subject to this regulation shall be made by means of
any proxy statement, form of proxy, notice of meeting or other
communication, written or oral, containing any statement which, at
the time and in the light of the circumstances under which it is
made, is false or misleading with respect to any material fact, or
which omits to state any material fact necessary in order to make
the statements therein not false or misleading . . . .
Claims under § 14(a) are subject to the Private Securities Litigation Reform Act (“PSLRA”), 15
U.S.C. § 78u-4(b). Little Gem Life Sciences LLC v. Orphan Med., Inc., 537 F.3d 913, 916-17
(8th Cir. 2008). In order to state a § 14(a) and Rule 14a-9 claim under the PSLRA, a plaintiff
must, among other things, identify each statement alleged to have been misleading and the reason
why the statement is misleading. Id.; see also Resnik v. Swartz, 303 F.3d 147, 151 (2d Cir. 2002)
(“omission of information from a proxy statement will violate [§ 14(a) and Rule 14a-9] if either
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the SEC regulations specifically require disclosure of the omitted information in a proxy
statement, or the omission makes other statements in the proxy statement materially false or
misleading”).
Gottlieb does not cite a single statement in the proxy statement that she says is false or
misleading. Instead, she cites various truthful statements made in the proxy statement and
argues, in essence, that defendants must tell her more about the subject of those statements. In
arguing that § 14(a) and Rule 14a-9 impose an affirmative duty on directors to disclose all
material information to shareholders — even if that information is not necessary to prevent other
statements from being false or misleading — Gottlieb relies on broad language from cases
concerning materiality. But the element of materiality is distinct from the element of a false or
misleading statement. Gottlieb’s reading of § 14(a) and Rule 14a-9 is inconsistent with both the
plain language of those provisions and Little Gem, which requires plaintiffs to identify a false or
misleading statement.2 Because Gottlieb has not identified any such statement in the proxy
statement, she has not demonstrated a likelihood of success on her § 14(a) claim.
2. Fiduciary Duty
Gottlieb next contends that the board members breached their fiduciary duty under
Minnesota law to disclose material information to shareholders. Although Gottlieb
acknowledges that her claim arises under Minnesota law, she relies heavily on Delaware law and
contends that Minnesota courts would apply the same standards that Delaware courts apply to
determine the scope of a director’s duty to disclose.
2
Some of the SEC’s rules regarding proxies do create an affirmative duty to disclose
certain information. See, e.g., 17 C.F.R. § 240.14a-101 (specifying certain information that must
be included in proxy statements). Gottlieb does not allege a violation of any of these rules.
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The Court does not believe that Gottlieb has shown that she is likely to succeed on her
fiduciary-duty claim. To begin with, as the parties candidly acknowledge, Minnesota law in this
area is somewhat underdeveloped. It is therefore not entirely clear whether, under these
circumstances, Minnesota would impose a common-law duty to disclose information in a proxy
statement beyond what is required by federal securities laws or relevant state statutes. Even if
Minnesota would require the disclosure of additional information, the Court doubts that
Minnesota would go as far as some Delaware lower courts have gone in requiring information to
be disclosed. And even if Minnesota courts would go as far as those Delaware courts, the cases
on which Gottlieb relies are distinguishable. Finally, and perhaps most importantly, the Court
has been presented with absolutely no evidence — save the proxy statement itself — concerning
the merits of Gottlieb’s claim. Gottlieb has not submitted so much as a declaration averring that
the information she seeks would be material to her vote, much less an expert affidavit stating that
a reasonable investor would likely find the omitted information material.3 Nor has Gottlieb
shown that the financial information she seeks — such as the companies’ financial forecasts —
are reliable and themselves not misleading. Given both the uncertain state of the law and the
sparse state of the record, the Court simply cannot say that Gottlieb is likely to succeed on the
merits of her breach-of-fiduciary-duty claim.
Turning to the specifics of Gottlieb’s arguments:
3
Indeed, the only “expert” evidence before the Court is the reaction of the market to the
announcement of the merger, which was positive: The price of Navarre’s stock rose from $1.41
per share on the day before the merger was announced to $1.57 per share on the day after. See
http://finance.yahoo.com/q/hp?s=NAVR+Historical+Prices.
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Under Delaware law, directors are required to “disclose fully and fairly all material
information within the board’s control when they seek shareholder action.” In re Netsmart
Techs., Inc. S’holders Litig., 924 A.2d 171, 199 (Del. Ch. 2007) (citation and quotations
omitted). A fact is material if there is a “substantial likelihood that [its] disclosure . . . would
have been viewed by the reasonable stockholder as having significantly altered the total mix of
information made available.” Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 143 (Del.
1997) (citation and quotations omitted). But “[o]mitted facts are not material simply because
they might be helpful,” and shareholders are not entitled to demand “all the financial data they
would need if they were making an independent determination of fair value.” Skeen v. Jo-Ann
Stores, Inc., 750 A.2d 1170, 1174 (Del. 2000). “So long as the proxy statement, viewed in its
entirety, sufficiently discloses and explains the matter to be voted on, the omission or inclusion
of a particular fact is generally left to management’s business judgment.” In re 3Com S’holders
Litig., No. 5067-CC, 2009 WL 5173804, at *1 (Del. Ch. Dec. 18, 2009).
In this case, the proxy statement contains detailed financial data about SpeedFC,
including consolidated balance sheets, statements of operations, changes in stockholders’ equity,
and cash-flow statements for fiscal years 2010 and 2011; consolidated interim financial
statements as of June 30, 2012; selected historical financial data going back to 2007; an
explanation of SpeedFC’s accounting policies and practices; information about SpeedFC’s
services, customer base, assets, business partnerships, and credit agreements; and SpeedFC
management’s analysis of SpeedFC’s financial condition and results of operations. Hopkins
Decl. Ex. A at 42-50 & Apps. A, B. The proxy statement also contains a combined balance sheet
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and a statement of operations for Navarre and SpeedFC that were prepared as if the merger had
already occurred. Hopkins Decl. Ex. A at 34-42.
Gottlieb contends that this is not enough information to make an informed judgment as to
whether Navarre’s acquisition of SpeedFC is advisable. In order to cast an informed vote,
Gottlieb claims, she must have SpeedFC’s and Navarre’s financial forecasts and Navarre’s
predictions as to the amount of cost savings and other synergies that will be realized from the
proposed transaction. On its face, this argument contradicts the Delaware Supreme Court’s
holding in Skeen, in which the court rejected the plaintiffs’ claim for disclosure of financial
projections and other additional information because the company had already disclosed “basic
financial data,” including the company’s financial statements, quarterly market prices, and
dividends. Skeen, 750 A.2d at 1173-74.
Notwithstanding Skeen, some lower courts in Delaware have held that shareholders may
be entitled to financial projections in certain circumstances. See, e.g., Maric Capital Master
Fund, Ltd. v. Plato Learning, Inc., 11 A.3d 1175, 1178 (Del. Ch. 2010); In re Netsmart, 924
A.2d at 201-04. These cases, however, arise in the context of cash-out mergers, where the
shareholders of the target company are seeking information to help them decide whether to
accept a particular price for their shares or (assuming that the merger goes forward) exercise their
appraisal rights. Maric Capital, 11 A.3d at 1178; In re Netsmart, 924 A.2d at 177. The cases
stress the importance of information about projections in these particular circumstances:
When stockholders must vote on a transaction in which they would
receive cash for their shares, information regarding the financial
attractiveness of the deal is of particular importance. This is
because the stockholders must measure the relative attractiveness
of retaining their shares versus receiving a cash payment, a
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calculus heavily dependent on the stockholders’ assessment of the
company’s future cash flows.
In re Netsmart, 924 A.2d at 200 (footnotes omitted).
This, however, is not a cash-out-merger case. Instead, Navarre shareholders are being
asked to judge the desirability of acquiring SpeedFC in the context of Navarre’s continued
operation as a going concern. Although projections of Navarre’s and SpeedFC’s future
performance might nevertheless be helpful, they remain individual pieces of an overall financial
picture. In contrast, in the cash-out-merger context, projections are of more immediate
importance to shareholders who are confronted with the choice of accepting a one-time payment
of cash or (if the merger goes forward) taking a chance on their appraisal rights. In that context,
the shareholders’ decision turns almost entirely on the current value of the stock, which, as Maric
Capital observed, “should be premised on the expected future cash flows of the corporation
. . . .” Maric Capital, 11 A.3d at 1178.
Thus, even accepting Gottlieb’s premise that Minnesota courts would adopt the farreaching interpretation of Delaware law embraced by Maric and Netsmart, the Court cannot say
that Gottlieb has shown a likelihood of success on her claim that she is entitled to the projections.
This is particularly so because Gottlieb has offered no evidence about the reliability of these
projections, other than that they were considered by the board and Roth. This is not sufficient to
require their disclosure. See In re PNB Holding Co. S’holders Litig., No. Civ. A. 28-N, 2006
WL 2403999, at *16 (Del. Ch. Aug. 18, 2006) (“our law has refused to deem projections material
unless the circumstances of their preparation support the conclusion that they are reliable enough
to aid the stockholders in making an informed judgment”); In re Checkfree Corp. S’holders
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Litig., No. 3193-CC, 2007 WL 3262188, at *2-3 (Del. Ch. Nov. 1, 2007) (fact that financial
advisor considered financial projections did not automatically require their disclosure).
The remainder of Gottlieb’s claims fare no better. Gottlieb seeks additional information
underlying Roth’s analysis of the merger price, including the identity of the companies and
transactions that were used for comparison purposes, the financial multiples that factored into the
analysis, the criteria Roth used to select the multiples, and — with respect to the discounted cashflow analysis — a wealth of various inputs such as the free cash-flow forecasts, Navarre’s
weighted average cost of capital, the range of values to corresponding EBITDA amounts, any
probabilities attached to these values/EBITDA amounts, the reasons why Roth valued the stock
consideration at $1.50 per share, and the relative weight of the different analyses and inputs.
It appears to the Court (which, admittedly, is not knowledgeable about matters of high
finance) that Gottlieb is essentially seeking the data necessary to replicate Roth’s analysis. But
Delaware law is clear that shareholders are entitled to no more than a “fair summary” of the
financial advisor’s work. In re Checkfree, 2007 WL 3262188, at *2-3 (emphasis added); see also
Skeen, 750 A.2d at 1174 (shareholders are not entitled to “all the financial data they would need
if they were making an independent determination of fair value”); In re Staples, Inc. S’holders
Litig., 792 A.2d 934, 954 (Del. Ch. 2001) (“the duty did not extend to the provision of
information to permit stockholders to make ‘an independent determination of fair value’”
(quoting Skeen)). Here, the proxy statement discloses Roth’s entire fairness opinion; the
information Roth relied on and the types of analyses it performed; the estimates of SpeedFC’s
value generated by Roth’s various analyses; and the mean and median enterprise-value-toEBITDA multiples generated in Roth’s comparable-companies analysis. Hopkins Decl. Ex. A
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at 23-26 & App. C. Given these disclosures, the Court does not believe that Gottlieb has shown
a likelihood of success on her claim that defendants have not met the “fair summary” standard
and that she is entitled to additional information about Roth’s analysis.
Gottlieb also seeks additional information concerning Roth’s conflict of interest. The
proxy statement discloses that $200,000 of Roth’s $250,000 fee for the fairness opinion is
contingent on the consummation of the merger. Hopkins Decl. Ex. A at 26. The proxy statement
also discloses that, in addition to rendering a fairness opinion, Roth will serve as the placement
agent for the financing Navarre will need if the merger is approved. Hopkins Decl. Ex. A at 26.
The statement discloses the details concerning how Roth’s placement fee will be calculated and
Navarre’s estimate that $35 million in financing will need to be arranged by Roth. Hopkins
Decl. Ex. A at 26. In short, the proxy statement makes it abundantly clear that Roth has a large
financial stake in the merger being consummated.
Despite these disclosures, Gottlieb contends that she needs additional information so as to
more precisely gauge the nature of Roth’s conflict of interest, including the amount that Navarre
intends to finance through debt; when and why Roth was retained for these roles in the
transaction; whether Navarre considered retaining anyone else; and what role Roth may have
played during Navarre’s evaluation of strategic alternatives. These demands appear to the Court
to border on the frivolous. The proxy statement discloses detailed information concerning the
large fees that Roth has riding on the consummation of the merger and makes it obvious that, in
opining on the fairness of the transaction, Roth has a conflict of interest. The additional
information Gottlieb seeks would not illuminate that point in any meaningful way. See Cnty. of
York Emps. Ret. Plan v. Merrill Lynch & Co., No. 4066-VCN, 2008 WL 4824053, at *11 (Del.
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Ch. Oct. 28, 2008) (“this Court has held that the precise amount of consideration need not be
disclosed, and that simply stating that an advisor’s fees are partially contingent on the
consummation of a transaction is appropriate”).
Finally, Gottlieb contends that she is entitled to information about the strategic
alternatives considered by the company. Like Gottlieb’s arguments concerning Roth’s conflict of
interest, this argument, too, appears to border on the frivolous. “Delaware law does not require
management to discuss the panoply of possible alternatives to the course of action it is
proposing . . . .” In re 3Com, 2009 WL 5173804, at *6 (citation and quotations omitted); see
also David P. Simonetti Rollover IRA v. Margolis, No. 3694-VCN, 2008 WL 5048692, at *12
(Del. Ch. June 27, 2008) (“In the usual case, where a board has not received a firm offer or has
declined to continue negotiations with a potential acquirer because it has not received an offer
worth pursuing, disclosure is not required.”); Globis Partners, L.P. v. Plumtree Software, Inc.,
No. 1577-VCP, 2007 WL 4292024, at *14 (Del. Ch. Nov. 30, 2007) (rejecting plaintiff’s demand
for disclosure of other potential merger partners where there was no indication of director
malfeasance).
In short, having examined all of Gottlieb’s arguments in the limited time available, the
Court concludes that Gottlieb is not likely to succeed on the merits of her claim that defendants
have breached their fiduciary duties to her.
C. Balance of Harms and the Public Interest
Gottlieb argues that being deprived of her right to cast an informed vote will cause her
irreparable harm because stock transactions and mergers are difficult to unscramble and because
the harm to her interests as a shareholder is difficult to quantify. As a general matter, the Court
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agrees that, in cases of this type, the shareholder faces some risk of irreparable harm. At the
same time, however, that risk must be balanced against the risk that the Court might inflict
irreparable harm by enjoining the merger. Although Gottlieb downplays the harm of an
injunction as speculative, the Court agrees with defendants that enjoining a large and complex
transaction such as this will at a minimum create uncertainty and delay. Such a delay could also
impose costs on the participants in the form of the lost time value of money, and ultimately could
even jeopardize the transaction. See In re Dollar Thrifty S’holder Litig., 14 A.3d 573, 617-18
(Del. Ch. 2010); In re Checkfree, 2007 WL 3262188, at *4. Under these circumstances, and in
light of Gottlieb’s failure to show a likelihood of success on the merits, the public interest
dictates that Gottlieb’s motion be denied.
The Court’s conclusion is bolstered by the fact that, of Navarre’s 37,193,454 outstanding
shares, Gottlieb has not alleged how many she owns, nor (as noted above) has she explained in a
declaration why she needs the sought-after information in order to cast an informed vote. Thus,
for all the Court knows, the Court is being asked to enjoin a $50 million transaction by a person
who owns no more than a single share of Navarre stock (worth less than $2) and who has no real
interest in the omitted information. The Court does not mean to say that shareholders who own
only a few shares do not have a right to cast an informed vote. But it is difficult to justify the
extraordinary remedy of a preliminary injunction of a complex transaction affecting thousands of
people — including hundreds of employees of Navarre and SpeedFC — on the strength of a
single shareholder’s complaint and in the absence of any evidence that the sought-after
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information has any practical value to her or any other shareholder.4 Given that Gottlieb is
unlikely to succeed on the merits, such a remedy cannot be justified in this case.
ORDER
Accordingly, based on the foregoing, and on all of the files, records, and proceedings
herein, IT IS HEREBY ORDERED THAT plaintiff’s motion for a preliminary injunction [ECF
No. 4] is DENIED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: November 7 , 2012
s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge
4
Gottlieb points out that she seeks relief on behalf of a class. At this stage, however, it is
too early to determine whether a class should be certified and, more importantly, the fact that
Gottlieb pleaded claims for class relief does not demonstrate that other Navarre shareholders
share her desire to enjoin the merger. It is true, as Gottlieb points out, that another individual
recently filed an essentially identical case. See Pokoik v. Willis et al., No. 12-CV-2752
(PJS/JSM) (filed Oct. 29, 2012). The fact that a second person who also owns an unknown
number of Navarre’s 37,193,454 outstanding shares of common stock has also decided to file a
lawsuit does not, in the Court’s view, appreciably shift the balance of the harms.
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