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| CRWN > SEC Filings for CRWN > Form 8-K on 15-Jul-2009 | All Recent SEC Filings |
15-Jul-2009
Other Events, Financial Statements and Exhibits
On July 13, 2009, a lawsuit was brought in the Delaware Court of Chancery against each member of the Board of Directors of Crown Media Holdings, Inc. (the "Company"), Hallmark Cards, Incorporated and its affiliates, as well as the Company as a nominal defendant, by a minority stockholder of the Company regarding the recapitalization proposal which the Company received from Hallmark Cards, Incorporated (the "Proposal"). The plaintiff is S. Muoio & Co. LLC which owns beneficially approximately 5.8% of the Company's Class A common stock, according to the complaint and filings with the Securities and Exchange Commission. The Proposal, which the Company publicly announced on May 28, 2009, provides for a recapitalization of its outstanding debt to Hallmark Cards affiliates in exchange for new debt and convertible preferred stock of the Company. The lawsuit claims to be a derivative action and a class action on behalf of the plaintiff and other minority stockholders of the Company. The lawsuit alleges, among other things, that, the defendants have breached fiduciary duties owed to the Company and minority stockholders in connection with the Proposal. The lawsuit includes allegations that if the Proposal is consummated, an unfair amount of equity would be issued to the majority stockholders, thereby reducing the minority stockholders' equity and voting interests in the Company, and that the majority stockholders would be able to eliminate the minority stockholders through a short-form merger. The complaint requests the court to enjoin the defendants from consummating the Proposal and to award plaintiff fees and expenses incurred in bringing the lawsuit.
On July 14, 2009, the Company issued a press release announcing that that the Special Committee of the Company's Board of Directors formed to review and consider the Proposal has retained Morgan Stanley & Co. Incorporated as its independent financial advisor. The press release is furnished as Exhibit 99.1 to this Form 8-K.
A list of exhibits filed herewith is contained on the Exhibit Index, which immediately precedes such exhibits and is incorporated herein by reference.
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