[Legal Injunction]on August 25, 2003, a purported class action
~We can substitute with MAMG/Bob Pearce
was filed in the
Court of Chancery of the State of Delaware in and for New Castle
County against the Company and its directors styled "Pyles v.
Cal-Maine Foods, Inc., et al., C.A. No. 20507." The proposed
class in the Pyles Action consists of all holders of the
Company's common stock other than the directors of the Company,
their affiliates and the Company's Employee Stock Options Plan
(ESOP).
The complaint in the Pyles Action generally alleges, among other
things, that the directors breached their fiduciary duties in
approving the reverse stock split, that the structure and timing
of the reverse split is unfair to the holders of the Company's
common stock other than the directors of the Company and the
participants in the Company's ESOP and the price being paid for
fractional shares in the reverse split is unfair.
The complaint in the Pyles Action seeks preliminary and
permanent injunctions to prevent consummation of the reverse
stock split, rescission or rescissory damages in the event the
reverse stock split is consummated and damages as a result of
the alleged breaches of fiduciary duty.
On August 26, 2003, the plaintiff in the Pyles Action filed a
motion for expedited proceedings, motion for preliminary
injunction and served discovery requests on the Company and its
directors. As of the date of this report, the Court of Chancery
has not scheduled a date and time to hear the plaintiff's
request to expedite proceedings in the Pyles Action.
On September 2, 2003, with the consent of the parties to each
action the Court of Chancery entered an order consolidating the
Schneider Action with the Pyles Action into one proceeding
styled, "In re Cal-Maine Foods, Inc. Stockholders Litigation,
C.A. No. 20507."
That same day, the Court of Chancery agreed to hear plaintiffs'
motion for preliminary injunction on October 1, 2003. On
September 16, 2003, the parties to the Consolidated Action
advised the Court that the Court did not need to hear
plaintiffs' motion for preliminary injunction on October 1 as
the date of the meeting to vote on the going private transaction
had been delayed. The parties are attempting to reschedule the
date for the hearing on plaintiffs' motion for preliminary
injunction in advance of the new date for the stockholders'
meeting to vote on the going private transaction.
-END OF STORY!
