Hastings Entertainment Special Committee Advised in Merger By Haynes and Boone Legal Team
July, 2014 - Dallas, Texas
Hastings Entertainment, Inc. reported July 15 that its shareholders approved the merger of Hastings and Draw Another Circle, LLC at a special meeting of Hastings’ shareholders in Amarillo, Texas.
The transaction is valued at about $21.4 million. The vote and merger come after a Texas federal court judge earlier denied a motion for preliminary injunction to halt the deal.
The June 19 decision rejecting a requested injunction was issued following a hearing before U.S. District Court Judge Mary Lou Robinson. At the hearing, Haynes and Boone, LLP Partner Nicholas Even argued on behalf of the Special Committee of the Board of Directors of Hastings. Haynes and Boone Partner Scott Wallace advised the Special Committee on the negotiation of the transaction.
In addition to Even, the Special Committee has been represented in the litigation by Haynes and Boone Associates Richard Guiltinan and Matt McGee, and attorney Nancy J. Stone of Amarillo. Hastings and its Chairman and Chief Executive Officer John Marmaduke are represented by Kelly Hart & Hallman LLP, and the buyer defendants (Joel Weinshanker, National Entertainment Collectibles Association, Inc., Draw Another Circle, LLC and Hendrix Acquisition Corp.) are represented by Cooley LLP.
In March 2014, two Hastings shareholders filed class action and derivative litigation against the corporation and its board of directors alleging that Hastings’ directors had breached their fiduciary duties in entering into the merger agreement with the affiliates of Mr. Weinshanker, the president and sole shareholder of National Entertainment Collectibles Association, Inc.
Plaintiffs further alleged that the company and directors had failed to disclose in the proxy statement material information regarding the transaction. Judge Robinson denied plaintiffs’ motion to enjoin the transaction, finding that plaintiffs failed to show either a substantial likelihood of success on the merits of their complaint or that they would be irreparably harmed if the transaction proceeded – both required elements for the injunction.
Following the completion of the merger July 15, Hastings is now a subsidiary of Draw Another Circle, LLC, an affiliate of National Entertainment Collectibles Association, Inc. and Mr. Weinshanker.
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