answer of nominal defendant international textile group, inc
DESCRIPTION
Answer of Nominal Defendant International Textile Group, Inc. ("ITG") to First Amended Consolidated ComplaintTRANSCRIPT
STATE OF SOUTH CAROLINA
COUNTY OF GREENVILLE
In re International Textile Group Merger Litigation
) ) IN THE COURT OF COMMON PLEAS ) ) ) C.A. No. 2009-CP-23-3346 )
ANSWER OF NOMINAL DEFENDANT INTERNATIONAL TEXTILE GROUP, INC., TO FIRST AMENDED CONSOLIDATED COMPLAINT
Nominal Defendant International Textile Group, Inc., ("NITG" or "combined company")
answers Plaintiffs' Consolidated Amended Complaint ("Complaint") as follows.
PRELIMINARY STATEMENT
NITG is not a party to any of the direct claims alleged in the Complaint. It is merely a
nominal party to the derivative claims, and the Complaint does not allege any acts or omissions
giving rise to liability against NITG. Accordingly, NITG responds to the Complaint primarily
with general denials so as to preserve Plaintiffs' obligation to prove all allegations not admitted
by Defendants. In addition to such general denials, NITG submits this Answer for the purpose of
articulating and preserving its position regarding matters on which a nominal party in a
shareholder derivative action is entitled to be heard. Swenson v. Thibaut, 250 S.E.2d 279, 293-
94 (N.C. App. 1978).
FIRST DEFENSE
NITG answers the Complaint upon its knowledge and otherwise upon information and
belief, and responds to the individually numbered paragraphs as follows.
1. As a nominal party, NITG generally denies the factual allegations asserted against
other parties, and therefore denies the allegations of Paragraphs 1 through 11.
2. The allegations of Paragraphs 12 through 18 contain representations as to the text
or holdings of certain legal authorities. Such authorities speak for themselves. To the extent an
answer is required, NITG denies such allegations.
3. As a nominal party, NITG generally denies the factual allegations asserted against
other parties, and therefore denies the allegations of Paragraphs 19 through 599.
4. With respect to the allegations of Paragraph 600, NITG admits that Plaintiffs
(other than the Asiafs) purport to bring this action as a shareholder derivative action, but denies
that they have standing to do so.
5. As a nominal party, NITG generally denies the factual allegations asserted against
other parties, and therefore denies the allegations of Paragraphs 601 through 602.
6. NITG denies the allegations in Paragraph 603.
7. NITG admits the allegations in Paragraph 604.
8. As a nominal party, NITG generally denies the factual allegations asserted against
other parties, and therefore denies the allegations of Paragraph 605 and 606.
9. The allegations of Paragraph 607 contain representations as to the text or holdings
of certain legal authorities. Such authorities speak for themselves. To the extent an answer is
required, NITG denies such allegations.
10. As a nominal party, NITG generally denies the factual allegations asserted against
other parties, and therefore denies the allegations of Paragraphs 608 through 611.
11. The allegations of Paragraphs 612 through 615 contain representations as to the
text or holdings of certain legal authorities. Such authorities speak for themselves. To the extent
an answer is required, NITG denies such allegations.
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12. As a nominal pm1y, NITG generally denies the factual allegations asserted against
other parties, and therefore denies the allegations of Paragraphs 616 through 726.
13. With respect to Plaintiffs' "PRAYER FOR RELIEF," NITG denies that Plaintiffs
are entitled to any relief individually, and expressly asserts that any recovery in this action
should accrue solely to NITG as an entity. NITG further denies that Plaintiffs are entitled to any
attorneys' fees, costs or other litigation expenses with respect to the derivative claims. NITG
denies that Plaintiffs are entitled to "judicial dissolution."
14. NITG denies that Plaintiffs are entitled to a trial by jury on any of the claims
asserted in the Complaint.
15. NITG generally denies any and all allegations not specifically admitted or denied
herein.
SECOND DEFENSE
16. Plaintiff Menezes' claims are barred in whole or in part because they were
released by a settlement agreement on September 28, 2006. All of the claims Plaintiff Menezes
asserts in this lawsuit arose or accrued before Plaintiff signed the release.
THIRD DEFENSE
17. Plaintiff Menezes' claims are barred in whole or in part because there has been an
accord and satisfaction. Plaintiff entered into a settlement agreement in satisfaction of disputes
with SCI, including disputes that were based upon or as an owner of any stock or interest, and he
accepted compensation to settle those disputes.
FOURTH DEFENSE
18. Plaintiffs' claims are barred in whole or in part by the doctrines of estoppel,
waiver, acquiescence, and/or ratification. Plaintiffs were aware of the claims asserted in this
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lawsuit and, on information and belief, approved, acquiesced to andlor failed to object to the
merger at issue in his lawsuit.
FIFTH DEFENSE
19. Plaintiffs' claims are barred because they failed to make a demand on the Board
of Directors of NITG and failed to meet the other procedural and substantive requirements for a
derivative action under applicable law.
SIXTH DEFENSE
20. Plaintiffs' claims are barred in whole or in part by Article VII of the Amended
and Restated Certificate of Incorporation of International Textile Group, Inc. (fJkja Safety
Components International, Inc.) and by principles of eXCUlpation under Delaware law. More
specifically, Article VII provides that "no Director of the Corporation will be personally liable to
the Corporation or its stockholders for or with respect to any acts or omissions in the
performance of his or her duties as a Director of the Corporation."
SEVENTH DEFENSE
21. Plaintiffs' claims are barred in whole or in part because they lack standing and are
inadequate representatives for this action.
EIGHTH DEFENSE
22. Plaintiffs' claims are barred in whole or in part because they were claims related
to those asserted in the lawsuit captioned Menezes v. SCI, et. al. (C.A. No.: 2006-CP-23-4236),
that were expressly dismissed on September 29, 2006, "with prejudice and are hereby res
judicata."
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NINTH DEFENSE
23. Plaintiffs cannot maintain a derivative action on behalf of SCI as a corporate
entity because SCI no longer has any corporate identity distinct from NITG.
TENTH DEFENSE
24. NITG hereby gives notice that it intends to rely upon such other and further
grounds for seeking dismissal of this action as may become available or apparent during pretrial
proceedings in this action and hereby reserves all rights to amend this Answer and to assert all
such additional arguments and claims.
WHEREFORE, NITG respectfully requests the following relief:
A) To the extent any recovery is obtained by any Plaintiff on any claim or cause of
action asserted in this case, for such recovery to be paid exclusively to NITG;
B) For an award in favor ofNITG and against Plaintiffs for the costs and attorneys'
fees incurred by NITG in participating in this action; and
C) For such other and further relief as the Court deems just and proper.
[SIGNATURE PAGE FOLLOWS]
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Dated this the 8th day of November, 2011.
11174424.1 (OGLETREE)
Respectfully submitted,
OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.e.
300 N. Main Street (29601) Post Office Box 2757 Greenville, SC 29602 Telephone: 864.271.1300 Facsimile: 864.235.4754
Attorneys for Defendant International Textile Group, Inc.
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STATE OF SOUTH CAROLINA
COUNTY OF GREENVILLE
In re International Textile Group Merger Litigation
) ) IN THE COURT OF COMMON PLEAS ) ) ) c.A. No. 2009-CP-23-3346 )
CERTIFICATE OF SERVICE
I do hereby certify that I have this day served a copy of the foregoing Answer of Nominal
Defendant International Textile Group, Inc., to First Amended Consolidated Complaint in the
above-referenced case upon the following person(s) by electronic mail:
William D. Herlong, Esq. [email protected]
Thomas L. Stephenson, Esq. [email protected]
Russell T. Burke, Esq. [email protected]
Christopher D. King, Esq. [email protected]
H. Sam Mabry, ill, Esq. [email protected]
J.D. Quattlebaum, Esq. [email protected]
W. Howard Boyd, Jr., Esq. [email protected]
Dated this the 8th day of November, 2011.
Michael J. McConnell, Esq. [email protected]
Mark Weintraub, Esq. [email protected]
Joshua M. Dickman, Esq. [email protected]
Jean-Paul Boulee, Esq. [email protected]
Arthur D. Felsenfeld, Esq. [email protected]
Cassandra L. Porsch, Esq. [email protected]
Mason A. Goldsmith, Esq. [email protected]
Jeffrey P. Dunlaevy, Esq.