Bloomberg: Moelis Subpoenaed in Globalstar-Mudrick Fight Over Nixed Merger
Investment bank’s fairness opinion supported disputed roll-up
Centerview and Allen & Co. also get demand for information
By Josh Saul
(Bloomberg) -- Moelis & Co. was subpoenaed for work it did on Globalstar Inc.’s aborted roll-up deal that’s now the focus of a lawsuit by Mudrick Capital Management and Warlander Asset Management.
The subpoena from a Mudrick attorney seeks documents and communications concerning Moelis’ fairness opinion, which supported the merger that Globalstar and Chairman James Monroe III planned to carry out earlier this year, filings in Delaware Chancery Court show. It also seeks information about the deal and any alternative transactions considered by Covington, Louisiana-based Globalstar, which provides mobile satellite voice and data services.
Mudrick has accused Moelis in court papers of serving as “a mere rubber stamp to Mr. Monroe’s preferred transaction” rather than fairly evaluating the merger. A Moelis spokeswoman declined to comment.
Centerview Partners LLC and Allen & Co. also received subpoenas related to the fairness opinion or the merger, court filings show. Centerview and Allen & Co. didn’t advise on the proposed transaction, didn’t receive any fees related to it and received subpoenas as fact witnesses due to their prior work for Globalstar, company representatives for each company said.
Globalstar announced the plan to merge with another firm and assets controlled by Monroe in April. Mudrick, the company’s largest outside shareholder, sued the company in May for books and records about the combination, saying it amounted to self-dealing. The satellite company was ordered to turn over emails and records related to the merger in July and the deal was called off two days later.
Mudrick and Warlander filed another lawsuit against Globalstar, Monroe and other company executives in September that asserted “claims of breaches of fiduciary duty, unjust enrichment and aiding and abetting.” Monroe has defended the merger, saying in an August earnings call that the deal “offeredall shareholders significant upside and mitigated downside risk.”
The subpoenas against Moelis, Centerview and Allen & Co. are part of that case, which is Mudrick Capital Management v. James Monroe III, No. 2018-0699, Delaware Chancery Court (Wilmington).
