Neuberger Berman Real Estate Income Fund Inc. Announces Court Opinion Upholding Defenses Against Unsolicited Tender Offer
May 11 2007 - 8:49AM
Business Wire
Neuberger Berman Real Estate Income Fund Inc. (NYSE: NRL) announced
that the federal district court for the District of Maryland issued
an Opinion this week in the case Neuberger Berman Real Estate
Income Fund Inc. v. Lola Brown Trust No. 1B et al., 04-cv-03056
(AMD) that stems from the hostile tender offer commenced by the
Lola Brown Trust No. 1B (the �Trust� or �Lola Trust�) in 2004 in an
effort to gain control of NRL. The Opinion issued by Judge Andre M.
Davis addresses those claims described in the court�s April 2007
Declaratory Judgment Order and resolves most of the other claims
between the parties. The Opinion confirms that NRL�s adoption of
serial rights agreements to defend against the tender offer does
not violate federal or state law or the Fund�s charter, i.e., that
NRL�s �poison pill� defense is valid. Noting that the Lola Trust
had taken no substantial steps toward a negotiation aimed at
improving its offer �despite a dramatic increase in the market
value of NRL shares throughout the pendency of this case,� the
court held that the Board did not violate the law in adopting
serial rights agreements �pending a final resolution of the
legality of its defensive measures taken in the good faith belief
that shareholder value was at risk.� Additionally, the court upheld
NRL�s interpretation of the scope of any exemption for the Lola
Trust under the Maryland Control Share Acquisition Act (the
�MCSAA�), ruling that although the Trust could vote the NRL shares
it held at the time NRL opted into the MCSAA, the Trust may only
vote any shares that it acquired after NRL�s opt-in on September
23, 2004, or that it acquires hereafter, with the approval of
two-thirds of NRL�s disinterested stockholders, as that statute
provides. The court also held that the Lola Trust is not an
investment company and is not a constituent entity of an investment
company within the meaning of the Investment Company Act of 1940,
and is not prohibited by section 12(d) thereof from owning more
than 3% of the outstanding voting shares of NRL. In the Opinion,
Judge Davis also held that NRL did not violate the prohibition
against insider trading when it completed a private sale of NRL
common stock to its affiliate, Neuberger Berman, LLC, after the
tender offer commenced. Finally, having determined that NRL acted
in accordance with the law in adopting defensive measures to thwart
the tender offer, the court dismissed the claim that NRL�s
defensive measures wrongfully interfered with the Lola Trust�s
ability to do business. The claim of wrongful interference was the
sole basis on which the Trust sought to recover a monetary award
against NRL. The Opinion addresses all pending claims in the
litigation with the exception of NRL�s claim under the Williams Act
that the tender offer (as amended on October 4, 2004) contains
false and/or misleading statements. The court denied the motions
for summary judgment filed by all parties regarding this claim and
indicated that �[i]f this issue is not rendered effectively moot by
the [analyses in the Opinion], then a prompt trial will be
calendared.� Forward-Looking Statements Statements made in this
release that look forward in time involve risks and uncertainties
and are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such risks and
uncertainties include, without limitation, the adverse effect from
a decline in the securities markets or a decline in the Fund�s
performance, a general downturn in the economy, competition from
other funds, changes in government policy or regulation, inability
of the Fund�s investment advisor to attract or retain key
employees, inability of the Fund�s investment advisor to implement
its investment strategy, inability of the Fund to manage unforeseen
costs and other effects related to legal proceedings or
investigations of governmental and self-regulatory organizations.
Neuberger BM RE (NYSE:NRL)
Historical Stock Chart
From Jul 2024 to Aug 2024
Neuberger BM RE (NYSE:NRL)
Historical Stock Chart
From Aug 2023 to Aug 2024