INDIANAPOLIS -- A Marsh Supermarkets Inc. shareholder is suing the grocery and convenience store chain, according to a report by the Associated Press. The suit claims company chairman Don Marsh and other directors mismanaged the company and squandered its capital before agreeing to a recent merger.
The lawsuit was filed Tuesday in Marion, Ind., County Superior Court. It wants the court to block Marsh's pending $88 million acquisition by the private investment fund Sun Capital Partners. It also wants the court to order Marsh to solicit other offers for [image-nocss] the company and to award unspecified damages.
The complaint said the plaintiff, Irene Kasmer, owns 1,000 shares of Marsh stock.
As reported in CSP Daily News, earlier this month, Marsh filed a complaint in Hamilton Superior Court, Hamilton County, Ind., naming MSH Supermarkets Holding Corp., MS Operations Inc., a subsidiary of MSH Supermarkets, Cardinal Paragon Inc. and Drawbridge Special Opportunities Advisors LLC as defendants.
The complaint asks for a declaratory judgment clarifying the company's rights and responsibilities under the merger agreement with MSH Supermarkets entered into on May 2, 2006. Marsh has asked for a determination of whether the provisions of the merger agreement requiring it not to waive or fail to enforce the standstill provisions in the confidentiality agreement, executed by Cardinal prevent Marsh from negotiating with Cardinal and Drawbridge or whether the merger agreement permits Marsh to consider the unsolicited communication from Cardinal and Drawbridge regarding a competing transaction if the Marsh board determines that it is reasonably likely to be a "superior proposal."
The company also requested an injunction that, depending upon how the court resolves the declaratory issue, either compels Cardinal and Drawbridge to withdraw their indications of interest and prohibits them from violating the terms of the confidentiality agreement entered into by Cardinal or prohibits MSH Supermarkets from terminating the merger agreement based on Marsh's taking any actions the court declares Marsh may take.
Finally, the company requested that, regardless of what other relief the court may order, the court declare that Marsh's filing of the lawsuit and requesting a judicial resolution of the controversy is not a breach of the merger agreement and an injunction prohibiting MSH Supermarkets from taking any action to terminate the merger agreement on that basis.
The company is a leading regional chain, operating 69 Marsh supermarkets, 38 LoBill Foods stores, eight O'Malia Food Markets, 154 Village Pantry c-stores, and two Arthur's Fresh Market stores in Indiana, Illinois and western Ohio. It also operates Crystal Food Services, which provides upscale catering, cafeterias management, office coffee, coffee roasting, vending and concessions and restaurant management and Primo Banquet Catering and Conference Centers, Floral Fashions, McNamara Florist and EnfloraFlowers for Business.
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