An investor in Hawk Corporation filed a lawsuit in State Court over alleged breaches of fiduciary duty arising out of the attempt to sell Hawk Corp too cheaply to Carlisle Companies, Inc
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed to Hawk Corp (HWK) investors by agreeing to sell Hawk Corp. to Carlisle Companies, Inc. via an unfair price at an unfair process.
On Friday, October 15, 2010, Hawk Corporation (NYSE Amex: HWK) and Carlisle Companies Incorporated (NYSE: CSL) announced the signing of an agreement whereby Carlisle Companies Inc has agreed to acquire Hawk Corp. for $50.00 per share in an all-cash transaction.
But the plaintiff claims that the purchase price and the method of the acquisition are “fundamentally unfair”. Shares of Hawk Corporation (Public, AMEX:HWK), which jumped in response to the takeover news to $49.90 per share, traded the day before the announcement at $49 per share and on Wednesday at $48.72 per share. In addition Hawk's Chairman and CEO Ronald E. Weinberg, along with directors Norman Harbert and Byron Krantz, who collectively hold approximately 34% of Hawk's outstanding common stock, have already entered into agreements with Carlisle to tender their shares. The plaintiff further alleges that the $50 purchase price overlooks Hawk's strong prospects for growth at the close of the recession.