Friday, November 12, 1999
Delta-Comair lawsuit likely to be settled
BY AMY HIGGINS
The Cincinnati Enquirer
A shareholder lawsuit filed against Comair Holdings Inc. and Delta Air Lines Inc. to stop the smaller carrier's acquisition is likely to be settled under an agreement announced Thursday.
Comair shareholders, who had alleged that company officials undervalued Comair stock, still might not get more than the $23.50 a share that Delta is paying for the 78 percent of the shares it did not already own. But the suit's settlement terms do open the door for other bidders by dropping a $50 million termination fee in the buyout deal.
“The market can now take over,” said Michael G. Brautigam, a shareholder attorney. “This levels the playing field.”
Comair would have paid the $50 million to Delta if the deal fell through or if it got a better offer. A Delta spokesman Thursday called the fee clause standard language in an acquisition offer.
Delta's Steve Forsyth said the settlement agreement (which includes provisions for Comair to pay up to $675,000 in attorney fees and $75,000 in attorney expenses) still is subject to court approval.
Mr. Brautigam said the settlement terms also require Delta to turn over to the plaintiffs' experts all of its research and materials used to value Comair stock, which traded around $28 a share in March but had fallen below $16 in the weeks before the acquisition was announced.
Mr. Brautigam said that if the material shows any wrongdoing or shows that the stock is indeed worth more, the lawsuits could proceed for damages.
Judges in the cases already have turned down requests to stop the acquisition.
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