ChinaHydro Electric Goes to Court to Fight Takeover By 'Insurgent' Group

ChinaHydro Electric Goes to Court to Fight Takeover By 'Insurgent' Group

By DEE MOORE 

     (CN) - ChinaHydro Electric Corporation is taking several companies to court for attempting a hostile takeover, calling defendants an "insurgent group in connection with its scheme to acquire control of the company."
     According to the complaint, all of the defendant companies were passive investors in ChinaHydro until last month when they made their intentions known. Defendants NewQuest Capital Management and CPI Ballpark Investments filed an amendment to its schedule, claiming in it that they now held a majority of shares in the ChinaHydro.
     "The filing disclosed, for the first time, the existence of the group and its plans to seek control of the company, namely to remove a majority of the directors on the company's board of directors and to replace them with a slate of their own nominees," the complaint states.
     "The insurgent group claims in their 13D filing that they beneficially own more than 40%o of the outstanding shares of the company, that they entered into a voting agreement dated August 21, 2012."
     But the "insurgent" group allgedly failed to make shareholders and the public aware of their "accumulation of blocks of stock."
     The group allegedly demanded a board meeting be called so that they could vote the five members they had targeted out and to be replaced with members handpicked by defendants. While the board responded, "the insurgent group decided to jump the gun on their own deadline" by calling an emergency meeting and "took action" and "amended the proxy materials" the complaint states.
     The Cayman Island company is seeking declaratory and injunctive relief to prevent the group from taking over the company. Defendants include CPI Ballpark Investments Ltd., a subsidiary of Newquest Capital Management (Cayman) Ltd., Swiss Re Financial Products Corp., China Environment Fund III, L.P., China Environment Fund III Management, L.P., China Environment Fund III Holdings Ltd., Aqua Resources Fund Limited, FourWinds Capital Management, Abrax, Abrax Limited and IWU International Ltd.
     They are represented by Theodore Altman, Timothy E. Hoeffner, Jonathan Siegfried and Michael P. McMahan DLA Piper LLP in New York and by Edward J. Fuhr and Joseph J. Saltarelli of Hunton & Williams LLP, also of New York.
Copyright by Courthouse News Service 2012
http://www.cnssecuritieslaw.com/2012/09/14/560.htm