A shareholder in Cybex International, Medway, MA, has filed a lawsuit against Cybex and is seeking class-action status.
The lawsuit, Guziec v. Cybex International Inc. et al, was filed in the Supreme Court of the State of New York, County of New York, naming the company and its directors as defendants. Levi & Korsinsky LLP, New York, is representing the plaintiff in the case.
The action alleges, among other things, that the defendants breached their fiduciary obligations to the company's shareholders by entering into a previously announced agreement and plan of merger in which all of the company's outstanding common stock held by its public shareholders would be converted into $2.55 per share cash in a "going private" merger transaction. In the deal, UM Holdings, along with Cybex Chairman John Aglialoro and board member Joan Carter (who also is Aglialoro's wife) would purchase the company. The group currently owns 49.5 percent of Cybex.
The lawsuit charges that the price being offered shareholders is too low and that the company has not looked at offers from other potential buyers. The lawsuit also states that because 49.5 percent of the company is owned by UM Holdings, Aglialoro and Carter, the group would have the ability to vote down competing bids.
The plaintiff seeks an unspecified amount of damages and to enjoin the company from proceeding with the proposed transaction. Consummation of the merger transaction is subject to various conditions, including approval of the merger agreement at a special shareholders meeting anticipated to be held in the first quarter of 2013.
Cybex says that the action is without merit, and it will vigorously pursue its defense.
After the initial announcement that the company planned to go private, several law firms, including Levi & Korsinsky LLP, announced they would look into whether any irregularities took place. A shareholder in Cybex International, Medway, MA, has filed a lawsuit against Cybex and is seeking class action status.