Free Motion for Summary Judgment - District Court of Colorado - Colorado

Case 1:04-cv-00725-RPM

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Case 1:04-cv-00725-RPM

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DISTRIC| COURT, CITY AND COUNTY OI: CourtAddress: 143? Bannock Sbeet Denver, 80202 CO PhoneNumber: 720-865-E301
The Quizno's Corporatjo4 a Colorado Corpomtion

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Attomey6for: Namc: Address:

WilliamS,Fagan; Chsrles Alber; MPatricia Alber;CarclA. Almstrong; A. LeighBock C. Lyn CroonsiJoAnn Robefsclooms;GaryCousiro; Martha Cousitro; JancsA. Dvomk: Fagan Capjtal, Inc.;Ilula Appleby Fagan; Andreas Iawson;LBT Enterprises, Mary Inc.; KccrEnSturkie; Tery Robinson; Sandstone Vntures. LLC: andTbomas O. Sturkie aLla Thomas Sturkie O. M.D. TheQuizro'sCorporation Theodore Altnlan Michael Hepworth R. Piperlvlarbury Rudniok WolfeLLP & l25l Avcnue ofth Aheicas NewYork NewYork10020-1104 (212) 835i000 (212) 835{00r theodore.altrion@pipcrrudnickcom [email protected] Chesley CulpIII Kcy Moye,Giles,O'Keefe, VcmFirc& Gonell LLP 1225 Seventee Steet,29thFloor h Dcnvs, CO80202-5529 (303)292-2900

COURT USEONLY
Case No.

Divisiory'Coutroom:

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Adalress: PhoneNo,r FaxNo.: E-Mail:

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TheQuizno's Corporatio!" its anomeys, by allcges:

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N{ture of this Proceeding 1. ("Quizno's') mrgedwith FireMe Corp.on December The Quizno'sCorporation

the was 21,2001, aftera majority voted ofQuizno'sshareholdrs to approve merger.Quizno's the suviving companyin the merger, Quizno'sis colrmenobg this procaedingin accordance "Dssente6' v/ith Colorado's (C.R.S. 7-ll3-l0l e, re4.)to determine fair lhe Rights" statutc $$ valueofthe shares to ofQuizno's heldby shareholders objected the mergor, Quizno's who naintains that the fair valuei6 58.50per sharc,which is ttie price offeredandpaid to Quiarc's shareholders wder the mgrgerag!ement. Rightsstatute,Quizuo's Underthe Dissentrs' who shareholders objeoted the mergerandwho compliedwith the statuteareentitledto to ofQuizno's who rgcaivethe fair valueoftheir shares.The Respondeots shareholdeN are and objected the merger,demandcd to morethan$8,50per sbareasthe fai! wlue oftheir shares, whosedemands remainunresolved. Jurisdiction 2. Thc jurisdiction ofthis Court in this matteris plenaryandcxclusivemdef,the

Coloiado Dissenters' Rights statute, C.RS, g 7.113-301(4). The Parties 3. underthe 1aw8 Coloradowith ils Pctitiole. Quizno'sis a corpolationorganjzed of

principal placeof business Denver,Colorado.Until its morgerwith FirenzgCor!., Quizno's in wasa public companywhoseshares and with the Securities Exoh&ngg wereregistered Commission taded or the NASDAQ SnallCap Market. and 4. whetthey R6pondentsaredissenting sharcholderc ofQuizno's who demanded

claim is their estimate and ofthe fair valueol thei! Quizllo's shares whosedemafilr rcmain unrosolved.Quizno'! paid $8.50po! 6hare thoseRespondents compliedwith the who to

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Dissente$' per The Rightsstatulqbutthose is Rspondeits thal$8.50 share notnough. clain Respondcnts are:
a.

w uatn !agar; 5, Charles Alber; M. Patricia Alberj A,

b.

d.

CarclA, Amstrong; Irigh Bock; C.LynCroom6; JoAryl Roberts Crooms; CaryCousino; Maiha Cousino; A. James Dvorak; Fagan Capital, Inc.; Laura Appleby Fagar\ Andreas Larvson; LBT Enterpdses, Inc.: MaryKeenan Sturkie;

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TerryRobinson; Sardstone Ventures, LLC; aod M.D. Thomas Sturki O. O. a/ly'a Thomas Sturkic

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BockgrouDd 5. OnNovember 2000, 13, commenoed a terderoffer for anyandall Quizno's

shares its common of per priorto the stock a cash at priceof $8.00 shane. thesix months In per tendcr offcr,Quizno's stock lraded had and beween $6.00 $6,50 shargandoler theprevious twelvemonths between pr and S6.00 $7.25 share. Aspanofits tender disclosd ils board that offermaterials, couldlater Quizno's
takeotheraclionsthat would resultin a second public steptEusactionin which all th9 remaining stockholdets would receivecashfor their shares Quizno'swould become privatecompany. a and Or December 2000,Quizno'stenderoffer expired. 12, 7. Od April I I, 2001, a special ofthe boatdofdirectors, nt meeting Quiano's

management re4uested theboardoxplorgoptionsfor oomplgting second a stspto Quizno's lhat (the "Special tcnderoff9r. At thesamcmelingth boardcstablished specialcornmittee a Committed')to roview andevaluat theseoptions,includitrganyproposalftom Quiao's (the majority shareholdets, RichardE, Sohrden Richad F. Schaden "Schadens'). The aad SpeeialCommittee ooosisted ofthrccnon-enployedircto6. The autlority of fte Speoial wos Cotr|rDitlec no! limited in anyway by the board. (who heldthe majority of Quizno'sshares) Hovever, the Schadens informedthe Speoial Conmitteo thal theywerenot interestd sellingtheir shares Quizno'scommonstook1oa in of third party. As a re6ull,the Spciat that Committee determined it would trot rrvostigatetho possibilityof sellingQuialo's to a third partybecause Schadens would not partioipate i.D thc sucha transaotion.

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9.

In May 2001,the Schadens madeanoffer to the SpecialCorhmitte acquireall to

outstanding shalesof Quizno'scomJnon stock,otherthar!shars ownedby themafld certatn per sffiliates, $8,00 sharc. for 10. During April andMay, the Special inte iewedsevemlinvestment Committee

banling firms to serveasthe SpecialCormittec's financialadvisor. Thpurpose ofthe Iinancialadvisorwasto evalusteQuizoo'soptionsto complete scond a stepto its tenderoffer; preparo financialanalysis Quizno's;advise SpecialCommitleewith respect tle laimess of the to of ary second stepproposal received Quizno's;anddelivera faimessopinion to the Special by Committee connectiol with anygoingprivateproposal. On May 9, 2001,rheSpecial in Committcedetrrmindlhat it would engage TuckerAnthonySuEoCapitalMarkets('Tucker Anthony") asits financialadvisor. IL During May 200I the Speoial Committee with TuckrAnthonysevsraltimas mel

to discuss ptoposed the plojectionsprovidedby Quizno's. mergercoNiderationandanalyze 12, On May I 7, TuckrAnthonyprescnted Sp.cial Committee with its wdttgn the

proliminaryfinancialanalysis ofth6 proposed merger.TuckerAlthony informdthe Special Co&mitteethat the fair valueofQuizno's shares a rangofrom $7.75to $8.75per share. was 13. In June2001tho SpecialConmitteeandits legalard financialadvisors with met

RichardE. Schaden the Schadens' arld legalcounsel negotiatc proposed to thc merger oonsideration. The SpccialCommittee statdthatthe priceofferedby the Schadcns, $8.00per share, not sumcientbased the infomation it haddevelopd wai on with Tu.kcr Anthony,ad proposedpriceof$8.75. Mr. Schaden a per subsequently TheSpecial 98.21 6haro. Foposed Committee, after digcussion, proposed rejected offr. Aftcr furtherdiscussions, Schadea this Mr.

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an olfer of$8.50 per shar9. After disoussion, SpecialCornmittee the to tentativelyagrd a pdce of$8.50pershare. 14. 21, (anda On June 2001, Special lhe Committee received oralfaimess ao opinion

written opinion to the ssmegffectwassubsequently delivercd)ftorn TuckefAnthony that a6of June21, 2001,andbasodon andsubjectto the assumptions, limitations, atrdqualifications oontained that opinion (includingreviscdmanagement in projotions), mergerconsidemtion the ofs8.50 per sharethat eaohQuiano'ssharholdcr would havethe right to rcceivein the merger is lair, from a financial point ofview, to that shaleholdcr. 15. The pric of $8.50per sharewasa 12%plerniumover the avera8e closingprice

for the sharcs the NASDAQ SmallcapMarket for th six-mofih hadingperiod eaded oI| June 21,2001. IlI addition,the price wasa l5% premiumover the closingprioefor t[e slEreson Msy 21, 2001,the datebeforeQuizoo'spublicly announced mergqrproposal,ao I l7o premium the over the closingprice for the shares tune 21, 200t, the datcbeforeQuizno'sannounced lhe oll oxecution ofthc mergerag:leef,tJ.en\ a26yopremiurn alr.d ovcr lhe closingpriceofthe common stockoDNovernber 2000the tradinSdatebeforeQuizno'santpuncedits texderoffr. 9, 16. Or June21,2001, the SpcialCommittecunanimously detelllined lo apprcvethe

mergeragrement declarethat the mergerwas fair to .nd in t-hc and ofQlizoo's bestinterests public shareholders, recommended the boardappmvethe mergeragrEement cau8e aDd and that and At Quiano'sto execute deliver thefterger agroement, th following meetingofthe boardof ditectors,the board(without the Schadens' palticipation)approved mrgEr ageementandthe the mergerandrecommended mergerto Quiano'sshaleholders, th inlo the Quizro's therientered mcrgeragreement with Firnzo Corp. Completion ofthe mergerwas subjectto approvalby

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holdersofa majoriryof Quizno'soutltanditg commonstockandreoeiptola flriiher faimess opinion from the fuuicial advisorretained the SpecialCommittee. by 17, O! November 2001,Quizno'sffled $'ilh the SeturitiesaodExohange 5,

Commi6sion sotto its shareholdersproxy statemnt and a explainingthemergerandeaclr shareholdefs right to receive$8.50per share ofthe mager. Theproxy uponcompletion statement includedthe faimssopinionofTucker Anthony, It alsoincludedinformalion coDcerDing disserleE' ights requircdby *re Dissenters' Rightsstrtute. I E. In Novembr D.ember2001,tho SpecialCommittee l,ooxplorpossiblo and met

altematives the FoposedmerScrthatweremisedby a sharholder, to FagaoCapital,Iic. One possiblealtemativethat wasconsidred a coditional proposal FaganC.pital, I1rc. w.s by to acquireshares ofQlrizno's for $10.63pe! sharc,but thc SpecialCommittecconcludd the that cotditions to the proposal couldnot be s.tis6ed andthat it wasnot a firm offer, This propos.l jn wasadd&ssed a lawsuitiD Colorado statgcoud tiled by alother shareholder aSainst Quizoo's andits directorsin November 2001that soughta leynporary reshaitriDg ondgr prvert the to sharhoidrs' meetingto votc on themerger, Theprincipalbasisoffredby theplaintifrfor the requestd tempomryrstiainingorderwa6that theae all altmativgto thomergrthatwould was pay shareholders $1053 a sharc. On November 2001,lhe courtdniodplaintitPs notio& 28, finding dratthe plaintill hadnot satisfiedany of therequirements obtaidng iljunctive relief, for Thecourt specificallyheldthat ". . . the plaintifi. ard its agents, havebeenlessthancandid,Iess thanaccuaate its reprccentationr, termsofit6 orvnolfer, in termsofit beingconditional, in in and anyrequestfor reliefwould not servothepublic's interest," The SpecialCommitteo its and advlsoisconsidered allemativcs proposed Fagan all by Capital,Inc. All6r considration the

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Cotnmittee Special dgtermined to change recornrDendation themeryer not that its wifh FirDz Corp.wasfair andiDthebestinteFsts Quizno's of publicshareholderr. 19. OnDecember 2001, was 21, with Coe.after merger tho marged Pirenze Quizno's

approved a special at meeting ofthe shareholdeE ofQuizno'sonthatda, Oneofthc cooditions fo. olosiflg under meigr the shallootluve revoked, agree eatwasthatTucker Anthony or modified changed faimess its to adveBe theholders Quizno's of opinioD anymanner in sharcs, Thiscondition latisficdat theclosing. was 20. As a rcsultofthe mergr, ceased bepubliclytradedto common stock Quizno's

paid In with shareholders pershare. accordance Colorado's Quizno's itsnon-dissenting 98.50 Disse$ters' Rigbtsstat$te, sharcholdels infoturing to the,E Quinro'i sentnotice thedksentiDg lhatthemerger been had paymenl thci. oharcs approved thatdissentec for and coulddemand under Disse.rters' the Rightsstntutc sending demand Quiztro's accordaoce in with by to a Dissentrs' Colorado'r Rights statutc. 21. 22. Each Respondent payment Quizno's. demanded ftom In acco.dance Colorado's statule, receiving vith DissenteB' Rights after dgmsnds

for pa)ment with s6nt who the complied theslatute Quizno's to lheRspondeats properiy adlouot plus as shares interst. Quimo'sestimated thefair valucofthe dissenG6' Quizno's estimated fah valueas$8.50 share. the pe! 23. Respondent Thomas Stu*ie (a/li/aThomas SturtieMD) failedto comply O. O.

with threquirements DissentcF to he oftho Rjghts statute lespct 15,000 with sharc6. Sinca did notproperly assert dissenters' wilh rcs!ot these 5,000 share6, righB to I ThoaasO. Stu*ie (a,\da Thomas Sturkie O. MD) waspaid9E.50 rhare theshares per uponconpletioo for ofthe

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merger. Respondent Thoftas O. Sturkie's(a/UaThomas SturkioMD's) demand with respot O, to othershares remainsunresolved. 74, ThERespondents hadbeenlaid by Quizno'sin accodalce vith the who

Disseltrs' Rightsstatutenotified Quizno'sthat theybelievedthe amountpaid wa6lesstllatl the fair valueoftheir shars that the intergst wasinconctlycalculatcd, dgmanded or due and payment oflhg fair valugofthe shares interestdue. Th9s9 remainunresolved. and demands 25. tr their demands, Respondnts lhe to fie stimate fair valt ofQuizno's shares be

$31.00per share,As-noted above,in th six monlhsprior to the tenderoffer madby Qui^o's in November per 21, 2000,Quizno's stock between haded and Od $6.00 $6.50 share. June 2001 andat the ciosingofthc merger, TuckerAnthonygovided its opinionthat themetger consideration of$8.50 per shaao.r/as to Quizno'sshareholders. Respondents The have fair estimated allegeda fair valueof Quizno'sshares is arbitrary,vexatious, not oade in or or that good faith. Quiztro's Requesbthat tbe Court Dternritrcthe Fair Vdce of Its Sh.res 26. shareholder's derDand remains C.R.S.$ 7-t t3-301 rcquiresth.t if a dissenting

ufisolved, Quizno'sshall file a pglitio! re4usting the fair valueofthe shares acaluqd ard that intorstbe determincdbythe Court. In accordance $ 7-113-301, with that Quizno'srequests this Cowi determin fair valueofthe Respondents' the shares, the accrued ard interest,for tlre Respondents Foperly compliedwith the Dissnters' who Rightsstatute, 27. that ofthis actio!, ilcluding but not aud Quiztro'srEquesls thc oost8 expenses

limited to the feegandexpeoses ofcoutuel, experts appreisers, a!6ssed thc arrd be egain6t Respondentsaccordance C,R.S. 7-113-302. in with $ WHEREFORB, the of ofthe shares Quizno'spraysthat this Coui defermin fair va.lue theRespondents compliedwith theDirsenters'Rigbtsstatute;that Quizno'sbe awardcd l^'ho its
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suchotherand recaive attomeys' fees, and herein; thatQuiano's costs expelses incurred and lurtherreliefasthis Courtdeterminq! bappmpriate. to DATED 19lh ofMarch,2002, this day submitled, Respectfully

Chesley IGy Culp III AttomcF for The Qlizno's Corporatioa

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