Plaintiff Christopher Taylor filed suit on Friday in the Southern District of New York against defendants BBQ Holdings, Inc., Jeffery Crivello, Charles E. Davidson, Peter O. Haeg, Rachael Maga, and Bryan L. Wolff. The complaint purported that the defendants violated the Securities Exchange Act of 1934 filed a materially incomplete and misleading 14D-9 form with the Securities and Exchange Commission concerning their proposed merger with MTY.
BBQ Holdings is described in the complaint as “an international restaurant company engaged in the business of franchising, and operating casual and fast casual dining restaurants.”
On August 8, 2022, BBQ Holdings entered into a merger agreement with MTY, where MTY would acquire all outstanding shares of BBQ Holdings for $17.25 per share. According to its website, MTY is one of the largest restaurant franchisors in Canada.
Following their announcement, the complaint said, the defendants filed the required 14D-9 form with the Securities and Exchange Commission. The form is meant to provide stockholders with the information necessary for them to make an educated and informed decision regarding whether or not they should tender their shares in favor of the proposed merger.
Taylor contends in the complaint that the defendant’s 14D-9 form was lacking in its containing of both significant and material facts. Taylor further stated that without the relevant information, he would be unable to “make a fully informed decision concerning whether or not to tender his shares in favor of the Proposed Transaction.
Specifically, the plaintiff asserts that the management-prepared financial projections in the 14D-9 form are materially misleading and fail to provide certain information like run-rate EBITDA, financial projections, financial multiples and metrics, objective selection criteria, and more. The 14D-9 form, Taylor posits, also “fails to disclose potential conflicts of interest” faced by the plaintiff.
The complaint cites two violations of the Exchange Act, one against defendant BBQ Holdings and one against the individual defendants in the complaint. Plaintiff Taylor is seeking a preliminary and permanent injunction preventing the defendants from consummating the proposed transaction or amending the 14D-9 form until they agree to include the aforementioned material information, rescissory damages in the event the transaction is consummated regardless, damages, litigation fees, and any other relief deemed equitable by the court.
The plaintiff is represented in the litigation by Rowley Law PLLC.
