Wolf Haldenstein Adler Freeman & Herz LLP has filed a class action complaint concerning possible breaches of fiduciary duty by the Board of Directors of VCG Holding Corp. (“VCG” or the “Company”) [NASDAQ:VCGH] arising out of the proposed “going-private” transaction of VCG by the Company’s Chairman and Chief Executive Officer, Troy Lowrie, Lowrie Management, LLLP, an entity controlled by Mr. Lowrie and certain other unidentified investors (collectively, “Lowrie”).
On Tuesday, November 3, 2009, VCG filed an 8-k with the SEC announcing that it would be acquired by Lowrie in an all cash offer. Under the terms of the agreement, VCG stockholders will receive cash of $2.10 in exchange for each share of VCG common stock. Pursuant to this proposed “going-private” transaction, Lowrie may be underpaying for VCG, thus unlawfully harming VCG shareholders.
The complaint alleges that throughout the relevant period, in breach of their fiduciary duties, management deliberately allowed the price of the Company’s stock to decline in order to facilitate defendant Lowrie’s plan to take the Company private at a greatly reduced price.
In pursuing their unlawful objective to squeeze out VCG’s public shareholders, the Directors have breached their fiduciary duties of loyalty, due care, independence, candor, good faith and fair dealing, and they have also aided and abetted such breaches by other VCG officers and directors. Although a Special Committee was formed by the Company to evaluate the Proposed Transaction, this committee is beholden to Defendant Lowrie and, thus, is not capable of a fair evaluation of the Proposed Transaction.
The Proposed Transaction will deprive VCG shareholders of important information regarding the value of their Company shares, and it will also deny them adequate consideration in light of the Company’s growth, anticipated operating results, net asset value, and future profitability. Under these facts and circumstances, the decision of the Director Defendants to consider the Proposed Transaction constitutes nothing more than a sham and breach of their fiduciary duties.
Wolf Haldenstein has been representing individual and institutional investors for many years, serving as lead counsel in numerous cases in U.S. federal and state courts.
If you own VCG common stock and you wish to discuss this matter with us, or have any questions concerning your rights and interests with regard to this matter, please contact:
Gustavo Bruckner or Derek Behnke
Wolf Haldenstein Adler Freeman
& Herz LLP
270 Madison Avenue
New York, New York 10016
Phone Numbers: (800) 575-0735