alden global suit
TRANSCRIPT
Case 1:11-cv-01946-RJS Document 1 Filed 03/21/11 Page 1 of 9
JUDGE SULLIVANJames A. Hunter (JH-1910) 1HUNTER & KMIEC150 East 44th Street, No. 9ANew York, New York 10017Tel: (646) 666-0122
E (C-. FrAWFSE-Mail: [email protected]. r----2-:zi---Attorneysfor Plaintiff rm 2 4 201111 1.7...„,
UNITED STATES DISTRICT COURT i TD7N. y. iSOUTHERN DISTRICT OF NEW YORK CASHierat i
EMMIS COMMUNICATIONS CORPORATION,
Plaintiff, ECF CASE
v. No.
ALDEN GLOBAL DISTRESSEDOPPORTUNITIES FUND, LP; AGDOF SLP, COMPLAINT FOR RECOVERY
LLC (f/k/a ALDEN GLOBAL DISTRESSED OF SHORT-SWING PROFITS
OPPORTUNITIES FUND GP, LLC); and UNDER 15 U.S.C. 78p(b)RANDALL D. SMITH,
Defendants.
Plaintiff Emmis Communications Corporation, by its attorneys Hunter &
Kmiec, hereby complains ofDefendants, averring as follows:
JURISDICTION AND VENUE
This action arises under Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Act"), 15 U.S.C. 78p(b). Jurisdiction is conferred upon
this Court pursuant to Section 27 of the Act, 15 U.S.C. 78aa.
Case 1:11-cv-01946-RJS Document 1 Filed 03/21/11 Page 2 of 9
2. Venue is properly laid in this District pursuant to Section 27 of the
Act because some or all of the Defendants are found in and transact business in this
District and because some or all of the transactions described herein occurred in this
District.
THE PARTIES
3. Plaintiff Emmis Communications Corporation (“Plaintiff” or the
“Company”) is an Indiana corporation whose principal place ofbusiness is located at One
Emmis Plaza, 40 Monument Circle, Suite 700, Indianapolis, Indiana 46204.
4. Alden Global Distressed Opportunities Fund, LP (“Alden LP”) is a
Delaware limited partnership whose principal place ofbusiness is located at 885 Third
Avenue, New York, New York 10022.
5. Defendant AGDOF SLP, LLC (formerly known as Alden Global
Distressed Opportunities Fund GP, LLC) (“Alden LLC”) is a Delaware limited liability
company whose principal place ofbusiness is located at 885 Third Avenue, New York,
New York 10022. Alden LLC is the sole general partner ofAlden LP.
6. Defendant Randall D. Smith (“Smith” and, collectively with
Alden LP and Alden LLC, the “Defendants”) is a natural person whose principal place of
business is located at 885 Third Avenue, New York, New York 10022. Smith is the
managing member ofAlden LLC.
STATUTORY REQUISITES
7. The violations of Section 16(b) of the Act described herein involve
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Case 1:11-cv-01946-RJS Document 1 Filed 03/21/11 Page 3 of 9
non-exempt securities in non-exempt transactions engaged in by non-exempt persons
within the meaning of the Act.
8. At all relevant times, the Class A common stock of the Company
was registered pursuant to Section 12 of the Act, 15 U.S.C. 78l, and was listed for
trading on The NASDAQ Stock Market LLC.
9. This action is brought within two years of the occurrence of the
violations described herein or within two years of the time when reports required by
Section 16(a) of the Act, 15 U.S.C. 78p(a), setting forth the substance of the
transactions here complained of were first filed with the U.S. Securities and Exchange
Commission (“SEC”).
FACTUAL ALLEGATIONS
10. At all relevant times, Defendants were shareholders of the
Company. Each Defendant beneficially owned in excess of 10% of the outstanding
shares of the Company’s Class A common stock.
11. In February, March, and April2010, the Defendants engaged in a
serious of transactions resulting in the purchase and sale of the Company’s Class A
common stock as described in paragraphs 12-22 below.
Defendants Enter into FourCash-Settled Equity Swap Agreements
12. Agreement #1: On February 25, 2010, Defendants entered into a
cash-settled equity swap agreement with a third party referencing 9,400 shares of the
Company’s Class A common stock.
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Case 1:11-cv-01946-RJS Document 1 Filed 03/21/11 Page 4 of 9
13. For purposes of Section 16 of the Act and the rules and regulations
of the SEC thereunder, the Defendants’ entry into the agreement described in
paragraph 12 above was equivalent in all relevant respects to the non-exempt purchase by
Defendants of 9,400 shares of the Company’s Class A common stock at the price of
$0.88 per share, such price being the contemporaneous market price of the Company’s
Class A common stock on the open market on February 25, 2010.
14. Agreement #2: On March 1, 2010, Defendants entered into a
cash-settled equity swap agreement with a third party referencing 83,900 shares of the
Company’s Class A common stock.
15. For purposes of Section 16 of the Act and the rules and regulations
of the SEC thereunder, the Defendants’ entry into the agreement described in
paragraph 14 above was equivalent in all relevant respects to the non-exempt purchase by
Defendants of 83,900 shares of the Company’s Class A common stock at the price of
$0.90 per share, such price being the contemporaneous market price of the Company’s
Class A common stock on the open market on March 1, 2010.
16. Agreement #3: On March 1, 2010, Defendants entered into a
cash-settled equity swap agreement with a third party referencing 12, 857 shares of the
Company’s Class A common stock.
17. For purposes of Section 16 of the Act and the rules and regulations
of the SEC thereunder, the Defendants’ entry into the agreement described in
paragraph 16 above was equivalent in all relevant respects to the non-exempt purchase by
Defendants of 12, 857 shares of the Company’s Class A common stock at the price of
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$0.90 per share, such price being the contemporaneous market price of the Company’s
Class A common stock on the open market on March 1, 2010.
18. Agreement #4: On March 19, 2010, Defendants entered into a
cash-settled equity swap agreement with a third party referencing 200,000 shares of the
Company’s Class A common stock.
19. For purposes of Section 16 of the Act and the rules and regulations
of the SEC thereunder, the Defendants’ entry into the agreement described in
paragraph 18 above was equivalent in all relevant respects to the non-exempt purchase by
Defendants of 200,000 shares of the Company’s Class A common stock at the price of
$1.00 per share, such price being the contemporaneous market price of the Company’s
Class A common stock on the open market on March 19, 2010.
20. Summary: The following table summarizes the Section 16
consequences of the transactions described in paragraphs 12-19 above:
Date of TransactionSection 16Treatment
Numberof Shares Price per Share
February 25, 2010Purchase of Class A
9,400 $0.88Common Stock
March 12010Purchase of Class A
83900 $0.90Common Stock,
March 12010Purchase of Class A
12857 $0.90Common Stock,
March 192010Purchase of Class A
200000 $1.00CommonStock,
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Date ofTransaction
One or More of Defendants’ Cash-SettledEquity Swap Agreements Are Terminated
21. On April27, 2010, one or more of the Defendants’ cash-settled
equity swap agreements, referencing at total ofnot less than 250,000 shares of the
Company’s Class A common stock, were terminated.
22. For purposes of Section 16 of the Act and the rules and regulations
of the SEC thereunder, the termination of the Defendants’ cash-settled equity swap
agreements as described in paragraph 21 above was equivalent in all relevant respects to
the non-exempt sale by Defendants of a total ofnot less than 250,000 shares of the
Company’s Class A common stock at the price of $2.20 per share, such price being the
contemporaneous market price of the Company’s Class A common stock on the open
market on April27, 2010, as described in the table below:
Section 16Treatment
Numberof Shares Price per Share
April27, 2010Sale of Class A
4,400 $2.20Common Stock
April 27, 2010Sale of Class A
4,800 $2.20Common Stock
April 27, 2010Sale of Class A
4,400 $2.20Common Stock
April 27, 2010Sale of Class A
5,400 $2.20Common Stock
April 27, 2010Sale of Class A
10,400 $2.20Common Stock
April 27, 2010Sale of Class A
40,400 $2.20Common Stock
April 27, 2010Sale of Class A
34,000 $2.20Common Stock
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Date ofTransaction
Section 16Treatment
Numberof Shares Price per Share
April27, 2010Sale of Class A
16,400 $2.20Common Stock
April 27, 2010Sale of Class A
15,300 $2.20Common Stock
April 27, 2010Sale of Class A
76,500 $2.20Common Stock
April 27, 2010Sale of Class A
38,000 $2.20Common Stock
FIRST CLAIM FOR RELIEF
(AS TO ALL DEFENDANTS)
23. Plaintiff realleges and incorporates by reference the allegations in
paragraphs 1-22 above.
24. Certain of the sales described in paragraphs 21-22 above occurred
within six months of, and at prices higher than, certain of the purchases described in
paragraphs 12-20 above.
25. Each Defendant had a pecuniary interest, directly or indirectly, in
the shares of the Company’s Class A common stock purchased and sold as described in
paragraphs 12-22 above.
26. Under the “lowest-in, highest-out” method for computing realized
profits pursuant to Section 16(b) of the Act, Defendants realized recoverable profits as a
result of the transactions described in paragraphs 12-22 above in an amount equal to
approximately $310,000.
27. Pursuant to Section 16(b) of the Act, the profits realized by
Defendants as described in paragraph 26 above inured to and are recoverable by Plaintiff.
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SECOND CLAIM FOR RELIEF
(AS TO ALL DEFENDANTS)
28. Plaintiff realleges and incorporates by reference the allegations in
paragraphs 1-27 above.
29. This Second Claim for Relief is a precaution against possible
errors of detail attributable to gaps or inaccuracies in the public record, the failure ofany
Defendant to file accurate reports as required by Section 16(a) of the Act, or against the
discovery or execution of additional short-swing trades during the course of this action.
30. One or more of the Defendants purchased and sold shares of a
class of the Company’s equity (or derivative securities thereof) within less than six
months while a holder of in excess of 10% of the outstanding shares of any class of the
Company’s equity registered pursuant to Section 12 of the Act.
31. The purchases and sales described in paragraph 30 above cannot be
identified by Plaintiff with specificity because they have not been publicly reported, or
have not been accurately reported, and because Defendants have failed or refused to
disclose these trades (or the absence thereof) upon inquiry from Plaintiff’s counsel.
32. Each Defendant had a direct or indirect pecuniary interest in all of
the shares of the Company’s equity purchased or sold as described in paragraph 30
above.
33. The purchases and sales described in paragraph 30 above may be
matched against each other (or with other sales and purchases described herein) using the
“lowest-in, highest-out” method to arrive at profits, their exact amount being unknown to
Plaintiff, which profits inured to and are recoverable by Plaintiff.
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PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands judgment:
(a) Requiring each Defendant to account for and pay over to Plaintiff the
short-swing profits realized and retained by such Defendant in violation of
Section 16(b) of the Act, together with appropriate pre- and post-judgment
interest and the costs of this suit;
(b) Awarding to Plaintiff its costs and disbursements including reasonable
attorney's, accountant's, and expert witness fees; and
(c) Granting to Plaintiff such other further relief as the Court may deem just
and proper.
Dated: March 21, 2011New York, New York
HUNTER & KMIEC
By:.
Ja es A. HunterEast 44th Street, No. 9A
New York, New York 10017Tel: (646) 666-0122Fax: (646) 462-3356E-Mail: [email protected]
Attorneysfor Plaintif
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