Missteps and miscalculations by Cooper Tire & Rubber Co. killed any chance of completing its self-sale to Apollo Tyres Ltd., lawyers for the Indian tiremaker argued before the Delaware Chancery Court on July 9.
The two companies were back before Judge Sam Glasscock III, seeking his long-awaited final ruling on which company fouled up the proposed $2.5 billion acquisition, according to a Bloomberg BusinessWeek report. The acquisition deal came to an inglorious end on Dec. 30, 2013, setting off this latest of legal battles.
Countering Cooper’s claims at the time, Glasscock ruled on Nov. 8, 2013, that Apollo did not breach terms of its $2.5 billion deal to buy Cooper, and had not been suffering from “buyer’s remorse” as the reason why it had not closed its deal to buy Cooper for $35 per share. At the time, Glasscock said his was a partial ruling, but he has not yet revealed the remainder of his decision.
At stake now is whether Cooper is entitled to some $112 million in a breakup penalty that was attached to the acquisition deal signed in June 2013. If the judge finds that Cooper’s failings led to the deal falling apart, Apollo would not be forced to pay the penalty, barring further legal wrangling.
As the deal began its slow demolition last year, Cooper took Apollo to court, seeking to force the tiremaker to complete the $35 per share deal. On Nov. 9, 2013, Judge Glasscock ruled that “Cooper has failed to demonstrate a present entitlement to specific performance.”
Further, Glasscock wrote in his decision letter, was the question whether Cooper could actually comply with requirements that it produce complete and proper third quarter results to Apollo’s lenders. “Cooper is unlikely to be able to provide those financials due to the physical seizure of a Cooper subsidiary in China by a minority partner,” Glasscock wrote. If “timely reporting of the third-quarter financials is completed,” Cooper’s request for “specific performance will remain viable.”
Due to its loss of management control over its Cooper Chengshan (Shandong) Tire Co. joint venture tire company, Cooper was unable to report its third quarter 2013 results until March 2014, nearly three months after Cooper pulled the plug on any deal with Apollo.
Cooper appealed Glasscock’s initial ruling to the Delaware Supreme Court, which refused to hear the case.
There is no timetable for completion of this latest court proceeding.
