Jeff Smulyan's suit against backer Alden Global Capital changes venue
Defendant Alden wins a change from a local court in Marion County, Indiana to a federal court in Indiana. Emmis founder and CEO Jeff Smulyan originally sued Alden Global Capital on September 15, alleging breach of contract in their joint failed bid to take Emmis private. Alden says the change of venue is appropriate partially because "there is a reasonable probability that plaintiff will seek in excess of $75,000." Emmis remains a public company, after some of its preferred shareholders held out for a better deal, and the two sides couldn't reach agreement. Smulyan's JS Acquisition LLC offered owners of Emmis common stock $2.40 a share. "EMMS" has recently been trading below 90 cents.
October 29, 2010: The suit filed by JS Acquisition -- the entity formed by Emmis Communications chairman/CEO Jeff Smulyan two would take the company private -- against Alden Global Capital has been refiled in federal court.
JS Acquisition filed suit in Marion County Superior Court in Indiana last month last month after Alden pulled out of an agreement to finance Smulyan's bid to take Emmis private. On October 21, JS Acquisition LLC v. Alden Global Distress Opportunities Master Fund was filed in U.S. District Court for the Southern District of Indiana.
Alden pulled out of the buyout after weeks of unsuccessful attempts by Emmis to get a group of preferred shareholders to agree to terms on a proposal to exchange their stock for debt.