35. The consideration to be paid to Class members in connection with the Offer is unconscionable, unfair and grossly inadequate because, among other things, the Offer represents a significant discount to the recent trading value of Hanover’s common stock. Notably, Hanover’ common stock traded as high as $2.99 per share as recently as February 9, 2006 and was trading at $2.55 the day before the announcement of the Offer.
36. Because of its control over the Company and the Board, Chelsey is in a position to dictate the terms of any transaction. The directors are all beholden to Chelsey for their positions and the perquisites which they enjoy therefrom and cannot represent or protect the interests of the Company’s public shareholders with impartiality and vigor.
37. Chelsey has manipulated the Company, its financials, and its public statements about
Hanover’s current and potential future value which has depressed the Company’s stock price and ensured Chelsey’s ability to acquire the remaining shares of the Company that it does not already own at less than fair value from the Company’s public shareholders.
38. Chelsey has timed the proposal to freeze out Hanover’s public shareholders in order to capture for itself Hanover’s current value and future potential at a significant discount and without paying an adequate or fair price to the Company’s public shareholders.
39. Chelsey timed the announcement of the proposed buyout to place an artificial lid on
the market price of Hanover’s stock so that the market would not reflect Hanover’s actual value or improving potential, thereby purporting to justify an unreasonably low price.
40. Chelsey has access to internal financial information about Hanover, its true value. expected increase in true value and the benefits of 100% ownership of Hanover to which plaintiffs and the Class members are not privy. Chelsey is using such inside information to benefit itself in this transaction, to the detriment of the Hanover’ public stockholders.
41. Chelsey has clear and material conflicts of interest and is acting to better its own
interests at the expense of Hanover’s public shareholders. Chelsey, with the acquiescence of the rest of the directors of Hanover, a majority of whom they control, is engaging in self-dealing and not acting in good faith toward plaintiffs and the other members of the Class. By reason of the foregoing, Defendants have breached and are breaching their fiduciary duties to the members of the Class.
42. Unless the Offer is enjoined by the Court, defendants will continue to breach their
fiduciary duties owed to plaintiffs and the members of the Class to the irreparable harm of the members of the Class.
43. Plaintiffs and the Class have no adequate remedy at law.
WHEREFORE, plaintiffs pray for judgment and relief as follows:
A. Ordering that this action may be maintained as a class action and certifying plaintiffs as Class representatives;
B. Preliminarily and permanently enjoining defendants and all persons acting in concert
with them, from proceeding with, consummating or closing the Offer;
C. In the event the Offer is consummated, rescinding it and setting it aside or awarding
rescissory damages to the Class;
D. Directing defendants to account to Class members for their damages sustained as a
result of the wrongs complained of herein;
E. Awarding plaintiffs the costs of this action, including reasonable allowance for
plaintiffs’ attorneys' and experts' fees;
F. Granting such other and further relief as this Court may deem just and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By:
919 N. Market Street, Suite 1401
Mellon Bank Center
Wilmington, DE 19899
(302) 656-4433
Of Counsel:
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue
New York, New York 10017
THE WEISER LAW FIRM, P.C.
121 N.
