News Story from the LA Times. I copied this from a Yahoo post, so I cannot vouch for it's accuracy. Any comments? Shall all of us join in the lawsuit in a class action? I believe I would.
La Pizza Sues Chicago Pizza to Halt Deal
By LESLIE EARNEST
La Pizza Loca, thwarted in its bid to acquire Chicago Pizza & Brewery Inc., has filed suit seeking to block a deal in which the Mission Viejo-based company agreed to sell stock to investor ASSI Inc.
The suit said Chicago Pizza's directors violated their obligations to shareholders by allowing ASSI to acquire Chicago Pizza stock for a fraction of what La Pizza Loca had offered.
Buena Park-based La Pizza made an unsolicited bid in December to buy Chicago Pizza for $2 a share, but Chicago Pizza's board rejected the offer. Last week, Chicago Pizza, parent of BJ's Pizza & Grill, announced it had agreed to sell 1.25 million shares of stock to Nevada-based ASSI for $1 million and other considerations.
In a statement Wednesday, La Pizza Chief Executive Alex Meruelo complained that Chicago Pizza, after rejecting his bid, had "agreed to sell 1.25 million shares of stock for 80 cents per share plus the cancellation of warrants and two management contracts that appear to be nearly worthless."
Chicago Pizza Chief Executive Paul Motenko said the lawsuit,which was filed Tuesday in Orange County Superior Court, is"totally without merit."
He said the deal with ASSI would create an alliance between the two companies that would help fuel Chicago Pizza's expansion,partly because ASSI has agreed to provide funding for future projects. The transaction would boost ASSI's stake in Chicago Pizza to 16.3%.
La Pizza said it will seek to block the transaction and recover "unspecified damages." Meruelo owns 866,000 shares, about 13.5%, of Chicago Pizza, said Armando Delgado, La Pizza Loca's controller. The sparring companies both operate pizza eatery chains.
Chicago Pizza's stock closed Wednesday at $1.53, down 9 cents in Nasdaq trading.
Copyright 1999 Los Angeles Times. All Rights Reserved
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