17. The prosecution of separate actions by individual members of the Class would create
the risk of inconsistent or varying adjudications with respect to individual members of the Class which would establish incompatible standards of conduct for defendants, or adjudications with respect to individual members of the Class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.
18. Defendants have acted, or refused to act, on grounds generally applicable to, and causing injury to, the Class and, therefore, preliminary and final injunctive relief on behalf of the Class as a whole is appropriate.
SUBSTANTIVE ALLEGATIONS
Background of the Offer - Chelsey Acquires Its Controlling Stake
19. On or about May 19, 2003, Chelsey purchased all of the Company’s common stock owned by Richemont Finance S.A., a Luxembourg company ("Richemont"), representing, at the time, approximately 21.3% of the Company's common stock outstanding and 100% of the Company's Series B Preferred Stock for a purchase price of $40,000,000. The Company was not a 5 party to such transaction. As a result of this transaction, on such date, Chelsey became the beneficial owner of 29,446,888 shares of Common Stock of the Company, or approximately 21.3% of the Common Stock, and 1,622,111 shares of the Company's Series B Participating Preferred Stock, having a par value of $0.01 per share and ten votes per share (the "Series B Preferred Stock"), consisting of all of the issued and outstanding shares of preferred stock of the Company, and with its Common Stock collectively representing approximately 29.6% of the combined voting power of the Company's securities.
20. On November 30, 2003, the Company effectuated a recapitalization pursuant to a
Recapitalization Agreement, dated as of November 18, 2003, with Chelsey (the "Recapitalization Agreement"), reconstituted the Board of Directors of the Company and settled certain outstanding litigation between the Company and Chelsey (the "Recapitalization").
21. Prior to the consummation of the Recapitalization, Regan Partners was the holder of
38,795,017 shares of Common Stock of the Company, or approximately 28.0% of the outstanding Common Stock.
