Last Friday, a shareholder complained that Loral Space & Communications Inc. and its board of directors failed to disclose information that was relevant to its proposed buyout by Canada’s Telesat. The Southern District of New York filing alleged that Loral’s April 26 Securities and Exchange Commission registration statement is misleading and incomplete in violation of the Securities Exchange Act of 1934.
According to the complaint, Loral provides satellite communication services primarily through Telesat. Telesat, an Ottawa-based corporation, reportedly provides telecommunications and entertainment services in addition to operating satellites that remain in a fixed position above the equator and serve the Americas. The parties announced the acquisition in November 2020.
The lawsuit, similar to one filed last month by another Loral stockholder, argued that the proposed transaction should not proceed until investors have what they need to make an informed vote. Specifically, the plaintiff contended, Loral’s registration statement failed to disclose financial projections, inputs underlying financial analyses conducted by Loral ’s financial advisor, and potential conflicts of interest.
With regard to financial projections, Loral’s financial advisor, LionTree LLC, reportedly claimed to have reviewed “certain internal financial forecasts, estimates and other data relating to the business and financial prospects.” In view thereof, the plaintiff argued that the registration statement should have provided details about those projections. Additionally, the stockholder complained that the filing failed to disclose certain inputs and assumptions used in its “Net Value Impact to Loral Stockholders” analysis.
Similar to last month’s complaint against Loral, this pleading asserts that the filing discloses nothing about “the engagement of an additional financial advisor, Credit Suisse Securities (USA) LLC,” like how much the consultant was paid for its work. The two-count complaint asks the court to halt the acquisition process until shareholders are apprised of the missing information.
The plaintiff is represented by Rowley Law PLLC.
