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AND EXCHANGE COMMISSION
(Amendment No. ______)
Filed by a Party other than the Registranto
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. | Title of each class of securities to which transaction applies: | ||
2. | Aggregate number of securities to which transaction applies: | ||
3. | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
4. | Proposed maximum aggregate value of transaction: | ||
5. | Total fee paid: |
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
1. | Amount previously paid: | ||
2. | Form, Schedule or Registration Statement No.: | ||
3. | Filing Party: | ||
4. | Date Filed: |
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in the webcast at
www.amerco.com
Dear Stockholders: | July 18, 2008 |
1. | Election of two Directors; | |
2. | Appointment of BDO Seidman, LLP as the Company’s independent auditors for our fiscal year ending March 31, 2009; | |
3. | Re-ratification of a proposal to re-approve and re-affirm the SAC Transactions, including the actions taken by all AMERCO and its subsidiaries’ Boards of Directors, officers and employees in entering into the SAC Transactions. |
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Questions and Answers about these Proxy Materials and Voting | 2 | |||
Proposal 1 — Election of Directors | 7 | |||
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Board Committees, Meetings and Attendance | 9 | |||
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Exhibit A — Meeting Procedures | ||||
Exhibit B — Not used | ||||
Exhibit C — Not used | ||||
Exhibit D — Proxy | ||||
Exhibit E — Notice of Internet Availability of Proxy Materials | ||||
Exhibit F — Complaint | ||||
Exhibit G — AMERCO’s Dispositive Motion | ||||
Exhibit H — Opposition to Dispositive Motion | ||||
Exhibit I — AMERCO Reply to Opposition | ||||
Exhibit J — Denial of AMERCO’s Dispositive Motion | ||||
Exhibit K — Dismissal of Case | ||||
Exhibit L — Previous Disclosure | ||||
Exhibit M — April 2008 Stockholder Proposal | ||||
Exhibit N — Robbins Letter | ||||
Exhibit O — New Fee Structure Agreements |
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Item 1: | The election of two directors; |
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Item 2: | The ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2009; |
Item 3: | Re-ratification of the SAC Transactions, including the actions taken by all AMERCO and its subsidiaries’ Boards of Directors, officers and employees in entering into the SAC Transactions. |
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Item 1: | The Board recommends a vote “FOR” the Board’s proposal to elect the two nominated Directors; |
Item 2: | The Board recommends a vote “FOR” the Board’s proposal to ratify the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2009; |
Item 3: | The Board recommends a vote “FOR” ratification of the SAC Transactions. |
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Item 1: | For the election of directors, you may either vote “FOR” all the nominees to the Board of Directors, you may “WITHHOLD” for all nominees, or you may “WITHHOLD” your vote from any nominee you specify. |
Item 2: | For the ratification of the selection of BDO Seidman, LLP as the Company’s independent auditors, you may vote “FOR,” “AGAINST” or “ABSTAIN”. |
Item 3: | For the ratification of the SAC Transactions, you may vote “FOR,” “AGAINST” or “ABSTAIN”. |
• | To vote by proxy on the Internet, go to www.proxyvote.com and type in the control number indicated on your Proxy Card to complete an electronic proxy card. |
• | To vote by proxy over the telephone, dial1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will need the control number indicated on your proxy card. |
• | To vote by proxy using the enclosed proxy card (if you received a printed copy of these proxy materials by mail or if you printed the proxy card off the Internet), complete, sign and date your proxy card and return it promptly in the envelope provided or mail it to AMERCO c/o Broadridge, 51 Mercedes Way, Edgewood, New York 11717. |
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Item 1: | For the election of directors, the two nominees receiving the most “FOR” votes will be elected. If you do not specify how your shares are to be voted, your proxy will be voted “FOR” Item 1. |
Item 2: | For the ratification of the selection of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2009, there must be a “FOR” vote from the majority of the shares present at the Annual Meeting or represented by proxy. If you do not specify how your shares are to be voted, your proxy will be voted “FOR” Item 2. |
Item 3: | For the ratification of the SAC Transactions, there must be a “FOR” vote from the majority of the shares present at the Annual Meeting or represented by proxy. If you do not specify how your shares are to be voted, your proxy will be voted “FOR” Item 3. |
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M. Frank Lyons
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Class | Name | Term Expires | ||||
Class III | John M. Dodds | 2009 | ||||
Class III | James P. Shoen | 2009 | ||||
Class IV | Charles J. Bayer | 2010 | ||||
Class IV | Michael L. Gallagher | 2010 | ||||
Class I | John P. Brogan | 2011 | ||||
Class I | Daniel R. Mullen | 2011 |
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• | at least three of the directors satisfy the financial literacy requirements required for service on the Audit Committee; and | |
• | at least one of the directors qualifies as an audit committee financial expert under the rules of the Securities and Exchange Commission. |
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• | the stockholder’s name and address, including telephone number; | |
• | the number of shares of the Company’s stock owned by the recommending stockholder and the time period for which such shares have been held; | |
• | if the recommending stockholder is not a stockholder of record, a statement from the record holder of the shares (usually a broker or bank) verifying the holdings of the stockholder and a statement from the recommending stockholder of the length of time the that the shares have been held; and | |
• | a statement from the stockholder as to whether the stockholder has a good faith intention to continue to hold the reported shares through the date of the next annual meeting at which the candidate would be elected. |
• | the proposed nominee’s name and address; | |
• | the information required by Items 401, 403 and 404 of SECRegulation S-K (generally providing for disclosure of arrangements or understandings regarding the nomination, the business experience of the proposed nominee, legal proceedings involving the proposed nominee, the proposed nominee’s ownership of securities of the Company, and transactions and relationships between the proposed nominee and the Company); | |
• | a description of all relationships between the proposed nominee and any of the Company’s competitors, customers, suppliers, labor unions or other persons with special interests regarding the Company; | |
• | the qualifications of the proposed nominee; |
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• | a statement from the recommending stockholder that in his or her view, the nominee, if elected, would represent all the stockholders and not serve for the purpose of advancing or favoring any particular stockholder or other constituency of the Company. |
Shares of | Percentage of | |||||||
Common Stock | Common | |||||||
Beneficially | Stock | |||||||
Name and Address of Beneficial Owner | Owned | Class | ||||||
Directors: | ||||||||
Charles J. Bayer | 2,261 | ** | ||||||
Director | ||||||||
John P. Brogan | 6,000 | ** | ||||||
Director | ||||||||
John M. Dodds | 0 | ** | ||||||
Director | ||||||||
Michael L. Gallagher | 0 | ** | ||||||
Director | ||||||||
M. Frank Lyons | 300 | ** | ||||||
Director and Director Nominee | ||||||||
Daniel R. Mullen | 7,000 | ** | ||||||
Director |
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Shares of | Percentage of | |||||||
Common Stock | Common | |||||||
Beneficially | Stock | |||||||
Name and Address of Beneficial Owner | Owned | Class | ||||||
Named Executive Officers: | ||||||||
Edward J. Shoen(1) | 10,642,802 | 54.2 | % | |||||
Chairman and President of AMERCO and Chief Executive Officer and Chairman of U-Haul, Director and Director Nominee | ||||||||
James P. Shoen(1)(2) | 10,642,802 | 54.2 | % | |||||
Vice President of U-Haul Business Consultants, Director | ||||||||
Mark V. Shoen(1)(2) | 10,642,802 | 54.2 | % | |||||
Vice President of U-Haul Business Consultants | ||||||||
John C. Taylor | 1,800 | ** | ||||||
President of U-Haul International | ||||||||
Jason A. Berg | 489 | ** | ||||||
Chief Accounting Officer of AMERCO | ||||||||
Executive Officers and Directors as a group — 20 persons.(5) | 10,677,797 | 54.4 | % | |||||
5% Beneficial Owners: | ||||||||
Adagio Trust Company(1) | 10,642,802 | 54.2 | % | |||||
as Trustee under the “C” Irrevocable Trusts dated December 20, 1982 | ||||||||
Rosemarie T. Donovan(1) | 10,642,802 | 54.2 | % | |||||
As Trustee of the Irrevocable Trust dated November 2, 1998 | ||||||||
The AMERCO Employee Stock Ownership Plan(4) | 1,785,670 | 9.1 | % | |||||
5% Beneficial Owners: | ||||||||
Atticus Capital, L.L.C.(3) | 1,381,831 | 7.0 | % | |||||
767 Fifth Avenue New York, New York 10153 | ||||||||
Sophia M. Shoen | 1,305,560 | 6.6 | % | |||||
5104 N. 32nd Street Phoenix, Arizona 85018 |
** | The percentage of the referenced class beneficially owned is less than one percent. | |
(1) | This consists of 10,642,802 shares subject to a Stockholder Agreement dated June 30, 2006, which includes shares beneficially owned by Edward J. Shoen (3,488,023); Mark V. Shoen (3,529,748); James P. Shoen (1,950,308); Rosemarie T. Donovan, as Trustee of the Irrevocable Trusts dated November 2, 1998 (250,250); and Adagio Trust Company, as Trustee under the “C” Irrevocable Trusts dated December 20, 1982 (1,424,473). |
(2) | As of July 1, 2008 Mark V. Shoen and James P. Shoen also beneficially own 122,325 shares (2.01 percent) and 36,045 shares (.59 percent), respectively, of the Company’s Series A 81/2% Preferred Stock. The executive officers and directors as a group beneficially own 165,870 shares (2.67 percent) of the Company’s Series A 81/2% Preferred Stock. |
(3) | Share data based on information in Form 13F filed on May 15, 2008 with the SEC by Atticus Management LLC and Timothy R. Barakett. As of March 31, 2008, the Form 13F indicates that the reporting person had voting and dispositive power as to 1,381,831 shares. |
(4) | The Trustee of the AMERCO Employee Stock Ownership Plan (the “ESOP”) consists of three individuals without a past or present employment history or business relationship with the Company and is appointed by the Company’s Board of Directors. Under the ESOP, each participant (or such participant’s beneficiary) in the ESOP is entitled to direct the ESOP Trustee with respect to the voting of all Common Stock allocated to the participant’s account. In the event such participant does not provide such direction to the ESOP Trustee, the ESOP Trustee votes such participant’s shares in the ESOP Trustee’s discretion. In addition, all shares in the ESOP not allocated to participants are voted by the ESOP Trustee in the ESOP Trustee’s discretion. As of July 1, 2008, of the 1,810,747 shares of Common Stock held by the ESOP, 1,393,971 shares were allocated to participants and 416,776 shares remained unallocated. The number of shares reported as beneficially owned by Edward J. Shoen, Mark V. Shoen, James P. Shoen, and Sophia M. Shoen include Common Stock held directly |
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by those individuals and 4,342; 4,067; 3,994; and 197 shares of Common Stock, respectively, allocated by the ESOP to those individuals. Those shares are also included in the number of shares held by the ESOP. | ||
(5) | The 10,677,797 shares constitutes the shares beneficially owned by the directors and officers of the Company as a group, including the 10,642,802 shares subject to the Stockholder Agreement discussed in footnote 1 above. |
Mark V. Shoen, Vice President of U-Haul Business Consultants;
James P. Shoen, Vice President of U-Haul Business Consultants;
John C. Taylor, President of U-Haul International; and
Jason A. Berg, Chief Accounting Officer of AMERCO.
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• | Base salary; | |
• | Discretionary cash bonus; | |
• | Certain long-term incentives; and | |
• | Other benefits. |
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Stock | All Other | |||||||||||||||||||||||
Fiscal | Salary | Bonus | Awards | Compensation | Total | |||||||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($)(1) | ($)(2) | Compensation ($) | ||||||||||||||||||
Edward J. Shoen | 2008 | 675,004 | 490,000 | 4,647 | 80,000 | 1,239,651 | ||||||||||||||||||
Chairman and President of | 2007 | 678,004 | — | 5,472 | 80,000 | 763,476 | ||||||||||||||||||
AMERCO and U-Haul | ||||||||||||||||||||||||
Mark V. Shoen | 2008 | 623,077 | — | 4,647 | — | 627,723 | ||||||||||||||||||
Vice President of | 2007 | 646,154 | — | 5,472 | — | 651,626 | ||||||||||||||||||
U-Haul Business Consultants | ||||||||||||||||||||||||
James P. Shoen | 2008 | 565,962 | — | 4,647 | 50,000 | 620,609 | ||||||||||||||||||
Vice President of | 2007 | 568,952 | — | 5,472 | 50,000 | 624,424 | ||||||||||||||||||
U-Haul Business Consultants | ||||||||||||||||||||||||
John C. Taylor | 2008 | 285,581 | 75,000 | 4,647 | 10,000 | 375,228 | ||||||||||||||||||
President of U-Haul | 2007 | 271,637 | 100,000 | 5,472 | 10,000 | 387,109 | ||||||||||||||||||
Jason A. Berg | 2008 | 183,462 | — | 3,807 | — | 187,269 | ||||||||||||||||||
Chief Accounting | 2007 | 175,385 | — | 4,228 | — | 179,613 | ||||||||||||||||||
Officer of AMERCO |
(1) | Amounts in this column represent the compensation cost recognized for financial statement reporting purposes underSOP 93-6 for Fiscal 2008 and 2007 with respect to Common Stock allocated under the ESOP. Grant date fair value is the closing price on date of grant for stock. | |
(2) | Amounts in this column represent annual fees paid to each Named Executive Officer in his capacity as a Director of the Company or U-Haul or as a member of a committee of the AMERCO Board. |
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Fees | ||||||||||||||||
Earned or | ||||||||||||||||
Paid in | All Other | Total | ||||||||||||||
Name of Director | Year | Cash ($) | Compensation ($) | Compensation ($) | ||||||||||||
Charles J. Bayer(1),(2),(3) | 2008 | 120,000 | — | 120,000 | ||||||||||||
John P. Brogan(1),(2),(3),(4),(5),(12) | 2008 | 208,750 | — | 208,750 | ||||||||||||
John M. Dodds(1),(2),(4),(7) | 2008 | 130,000 | — | 130,000 | ||||||||||||
Michael L. Gallagher(1),(5),(9) | 2008 | 93,333 | — | 93,333 | ||||||||||||
M. Frank Lyons(1) | 2008 | 50,000 | — | 50,000 | ||||||||||||
Daniel R. Mullen(1),(2),(7),(8),(9),(11) | 2008 | 115,000 | — | 115,000 | ||||||||||||
Paul A. Bible(5),(10) | 2008 | 55,000 | — | 55,000 | ||||||||||||
Barbara Smith Campbell(6),(10) | 2008 | 55,000 | — | 55,000 | ||||||||||||
Thomas W. Hayes(5),(10) | 2008 | 55,000 | — | 55,000 | ||||||||||||
Richard J. Herrera(6) | 2008 | 45,833 | — | 45,833 |
(1) | AMERCO Director | |
(2) | Audit Committee Member | |
(3) | Executive Finance Committee Member | |
(4) | Compensation Committee Member | |
(5) | Independent Governance Committee Member | |
(6) | Advisory Board Member | |
(7) | U-Haul International Board Member | |
(8) | Oxford Board Member | |
(9) | Special Committee Member — Stockholder Proposal | |
(10) | Special Committee Advisor — Stockholder Proposal | |
(11) | Mr. Mullen waived his fee as a Special Committee Member — the company made a charitable donation in this amount | |
(12) | Mr. Brogan received $58, 333 for services on the Independent Governance Committee from February 2005 through June 2007 |
John P. Brogan | John M. Dodds |
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John P. Brogan | Charles J. Bayer | John M. Dodds | Daniel R. Mullen |
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Name | Age* | Office | ||
Edward J. Shoen | 59 | Chairman of the Board, President, and Director | ||
Richard M. Amoroso | 49 | President of Republic Western Insurance Company | ||
Jason A. Berg | 35 | Principal Accounting Officer of AMERCO | ||
Laurence J. DeRespino | 47 | General Counsel | ||
Ronald C. Frank | 67 | Executive Vice President ofU-Haul field operations | ||
Mark A. Haydukovich | 51 | President of Oxford Life Insurance Company | ||
Gary B. Horton | 64 | Treasurer of AMERCO andU-Haul | ||
Robert T. Peterson | 57 | Controller ofU-Haul | ||
James P. Shoen | 48 | Vice President ofU-Haul Business Consultants, Director | ||
Mark V. Shoen | 57 | Vice President ofU-Haul Business Consultants | ||
John C. Taylor | 50 | President and Director ofU-Haul | ||
Carlos Vizcarra | 61 | President of Amerco Real Estate Company | ||
Rocky D. Wardrip | 50 | Assistant Treasurer of AMERCO andU-Haul | ||
Robert R. Willson | 57 | Executive Vice President ofU-Haul field operations |
* | Ages are as of June 30, 2008. |
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March 31, | ||||||||
2008 | 2007 | |||||||
(In thousands) | ||||||||
Audit fees | 3,656 | 4,130 | ||||||
Audit-related fees | 60 | 55 | ||||||
Tax fees | — | 375 | ||||||
All other fees | — | — | ||||||
Total | 3,716 | 4,560 |
ACCOUNTING FIRM
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AMERCO AND ITS SUBSIDIARIES’ BOARDS OF DIRECTORS, OFFICERS AND
EMPLOYEES IN ENTERING INTO THE SAC TRANSACTIONS
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(2) | The potential benefits of the Derivative Litigation to the Company. |
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(3) | Reasons why Plaintiffs believe the SAC Transactions were unfair to the Company. |
(4) | The specific terms of the SAC Transactions. |
(5) | Fairness review of SAC Transactions by an independent party. |
(6) | How the terms of the SAC Transactions were settled. |
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(7) | Use of Company Resources |
(8) | Matters considered by, and the conclusions of, the Special Committee. |
(9) | Explanation of who conducted and commissioned the real estate appraisals of the SAC Properties, and why the appraisals of certain of the SAC Properties were generated after such properties were sold from the Company to SAC. |
(10) | Disclosure of whether the SAC Properties were listed publicly for sale or were subject to a competitive bidding process. |
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(11) | Disclosure regarding the Company’s strategic business plan. |
(12) | Disclosure regarding what interests the Company retained in the properties sold to the SAC entities; Rights reserved by the Company with respect to the proceeds of sales when the SAC entities re-sold properties to third parties. |
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS August 28, 2008 The stockholder(s) hereby appoint(s) John M, Dodds, as proxy, with the power to appoint his substitute, and hereby authorizes him to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of AMERCO that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:00 a.m. PDT, on August 28, 2008, at the 2626 East Indian School Road, Phoenix, Arizona 85016 or via webcast at http://www.amerco.com, and any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR EACH PROPOSAL PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE CONTINUED AND TO BE SIGNED ON REVERSE |
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AMERCO 1325 AIRMOTIVE WAY SUITE 100 RENO, NV 89S02 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery 01 information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by AMERCO in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. VOTE BY PHONE -1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to AMERCO, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: AMERC01 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY AMERCO THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ITEMS 1, 2 AND 3. Vote on Directors 1. ELECTION OF TWO DIRECTORS Nominees: 1) EDWARD J. SHOEN 2) M.FRANK LYONS For Withhold for All All All Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the nurnber(s) of the nominee(s) on the line below. Vote on Proposals Boards 2. Appointment of BDO Seidman, LLP as the Company’s independent auditors for its Fiscal year ending March 31, 2009. 3. Re-ratification of a proposal to re-approve and re-affirm the SAC Transactions, including the actions taken by all AMERCO and its subsidiaries’ of Directors, officers and employees in entering into the SAC Transactions between 1992 and March 31, 2007. 4. In their discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). if no direction is made, this proxy will be voted FOR items 1, 2 and 3. If any other matters properly come before the meeting, or if cumulative voting is required, the person named in this proxy will vote in their discretion. For Against Abstain (NOTE; Please sign exactly as your name(s) appear(s) hereon. All holders must sign. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation, please sign in full corporate name, by authorized officer, if a partnership, please sign in partnership name by authorized person.) Signature [PLEASE SIGN WITHIN BOX] Pace Signature (Joint Owners) Date |
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AMERCO ** IMPORTANT NOTICE ** Regarding the Availability of Proxy Material You are receiving this communication because you hold shares in the above company, and the material you should review before you cast your vote is now available. This communication presents only an overview of the more complete proxy material that is available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy material before voting. Stockholder Meeting to be held on 08/28/08 Proxy Material Available Notice and Proxy Statement Annual Report PROXY MATERIAL — VIEW OR RECEIVE You can choose to view the material Online or receive a paper or e-mail copy. There is NO charge for requesting a copy. Requests, instructions and other inquiries will NOT be forwarded to your investment advisor. To facilitate timely delivery please make the request as instructed below on or before 08/08/08. AMERCO 1325 AIRMOTIVE WAY SUITE 100 RENO, NV 89502 HOW TO VIEW MATERIAL VIA THE INTERNET Have the 12 Digit Control Humberts) available and visit: www.proxyvote.com HOW TO REQUEST A COPY OF MATERIAL 1)BY INTERNET - www.proxyvote.com 2)BY TELEPHONE — 1-800-579-1639 3)BY E-MAIL* - sendmaterial@proxyvote.com *lf requesting material by e-mail, please send a blank e-mail with the 12 Digit Control Number (located on the following page) in the subject line. See the Reverse Side for Meeting Information and Instructions on How to Vote [GRAPHIC OMITTED][GRAPHIC OMITTED] |
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Meeting Information How To Vote Annual 08/28/08 8:00 A.M. PDT 07/01/08 Meeting Type: Meeting Date: Meeting Time: For holders as of: Meeting Location: U-Haul Moving and Storage Center 2626 East Indian School Road Phoenix, Arizona 85016 Meeting Directions: For Meeting Directions Please Visit: http://www.amerco.com Vote In Person Many stockholder meetings have attendance requirements including, but not limited to, the possession of an attendance ticket issued by the entity holding the meeting. Please check the meeting material for any special requirements for meeting attendance. At the meeting you will need to request a ballot to vote these shares. Vote By Internet To vote now by Internet, go to WWW.PROXYVOTE.COM, Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your notice in hand when you access the web site and follow the instructions. |
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Voting items [GRAPHIC OMITTED][GRAPHIC OMITTED] THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ITEMS 1, 2 AND 3, 1. ELECTION OF TWO DIRECTORS Nominees: 1) EDWARD J.SHOEN 2) M. FRANK LYONS 1) Appointment of BDO Seidman, LLP as the Company’s independent auditors for its fiscal year ending March 31, 2009. Re-ratification of a proposal to re-approve and re-affirm the SAC Transactions, including the actions taken by all AMERCO and its subsidiaries’ Boards of Directors, officers and employees in entering into the SAC Transactions between 1992 and March 31, 2007, In their discretion, upon such other matters that may properly come before the meeting or any adjournment or adjournments thereof. |
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MARTHAJ ASHCRAFT
Nevada State Bar No. 1208
JAMES E. BERCHTOLD
Nevada Bar No. 5874
LEWIS AND ROCA LLP
3993 Howard Hughes Pkwy, Suite 600
Las Vegas, Nevada 89109
Telephone: (702) 949-8200
Facsimile: (702) 949-8352
Nevada Bar No 8188
LEWIS AND ROCA LLP
5355 Kietzke Lane, Suite 200
Reno, NV 89511
(775) 770-2600
(775) 770-2612(fax)
IN AND FOR THE COUNTY OF WASHOE
PAUL F. SHOEN et al, Plaintiffs VS. SAC HOLDING CORPORATION et al, Defendants | Case No. CV02-05602 Consolidated with: (1) Case No. CV02-06331; (2) Case No. CV03-02486; and (3) Case No. CV03-02617 Dept No. B6 | ||
DERIVATIVE COMPLAINT FOR DAMAGES AND EQUITABLE RELIEF
5335 Kietzke Lane,
Suite 220
Reno, NV 89511
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Dated: November 17, 2006 | LEWIS AND ROCA LLP | |||
By: | /s/ Jasmine K. Mehta | |||
MARTHA J. ASHCRAFT | ||||
JAMES E. BERCHTOLD |
3993 Howard Hughes Pkwy, Suite 600 Las Vegas, Nevada 89109 Telephone: (702) 949-8200 Facsimile: (702) 949-8352 JASMINE K. MEHTA 5355 Kietzke Lane, Suite 200 Reno, Nevada 89511 Telephone: (775) 770-2600 Facsimile: (775) 770-2612 Attorneys for Plaintiff Paul F. Shoen LATHAM & WATKINS LLP MARC W. RAPPEL (admittedpro hac vice) BRIAN T. GLENNON (admitted prohac vice) 633 West Fifth Street, Suite 4000 Los Angeles, California 90071-2007 Telephone: (213)485-1234 Facsimile: (213)891-8763 Attorneys for Plaintiff Paul F. Shoen ROBBINS UMEDA & FINK LLP BRIAN J. ROBBINS KELLY M. McINTYRE 610 West Ash Street, Suite 1800 San Diego, CA 92101 Telephone: (619) 525-3990 Facsimile: (619) 525-3991 Attorneys for Plaintiff Ron Belec | ||||
5335 Kietzke Lane,
Suite 220
Reno, NV 89511
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BECKLEY SINGLETON CHTD IKE L. EPSTEIN DANIEL F. POLSENBERG 1875 Plumas Street, Suite 1 Reno, Nevada 89509-3387 Telephone: (775) 823-2900 Facsimile: (775) 823-2929 Attorneys for Plaintiff Ron Belec BERMAN, DEVALERIO, PEASE, TABACCO, BURT & PUCILLO JOSEPH J. TABACCO, JR. CHRISTOPHER HEFFELFINGER 425 California Street, Suite 2025 San Francisco CA 94104 Telephone: (415) 433-3200 Facsimile: (415) 433-6382 Attorneys for Plaintiff Glenbrook Capital Limited Partnership HAROLD B. OBSTFELD P.C. HAROLD B. OBSTFELD 260 Madison Avenue, 18th Floor New York, NY 10016 Telephone: (212) 696-1212 Facsimile: (212) 696-1398 Attorneys for Plaintiff Alan Kahn BECKLEY SINGLETON CHTD DAVID WASICK 1875 Plumas Street, Suite 1 Reno, Nevada 89509-3387 Telephone: (775) 823-2900 Facsimile: (775) 823-2929 Attorneys for Plaintiffs Glenbrook Capital Limited Partnership and Alan Kahn | ||||
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Attn: Daniel F. Polsenberg
Ike Lawrence Epstein
530 Las Vegas Blvd. South
Las Vegas, NV 89101
Attorneys for Ron Belec, Glenbrook Capital LP, and Alan Kahn
Attn: Joseph J. Tobacco Jr.
Christopher T. Heffelfinger
425 California Street, Suite 2025
San Francisco, CA 94104
Attorneys for Glenbrook Capital LP
Attn: Harold B. Obstfeld
100 Park Avenue, 20th Floor
New York, NY 10017-5510
Attorneys for Alan Kahn
Attn: Charles Edward Elder
Daniel Patrick Lefler
David Siegel
1800 Avenue of the Stars
Suite 900
Los Angeles, CA 90067-4276
Attorneys for Charles Bayer, Aubrey Johnson, M. Frank Lyons, John P.
Brogan, James J. Rogan, and John M. Dodds
Attn: Mark W. Rappel
Brian T. Glennon
633 W. Fifth Street, Suite 4000
Los Angeles, CA 90071
Attorneys for Plaintiff Paul F. Shoen
Attn: Bruce G. Murphy
265 Llwyds Lane
Vero Beach, FL 32963
Attorneys for Ron Belec
5335 Kietzke Lane,
Suite 220
Reno, NV 89511
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Attn: Calvin Dunlap
691 Sierra Rose Dr., Ste. A
P.O. Box 3689
Reno, NV 89505
Attorneys for SAC Defendants and Mark Shoen
Attn: Peter D. Fischbein
777 Terrace Avenue, 5th Floor
Hasbrouck Heights, NJ 07604
Attorneys for M.S. Management Company, Inc.
Attn: Daniel Hayward
9600 Gateway Drive
Reno, NV 89521
Attorneys for AMERCO
Attn: William S. Lerach
Travis E. Downs, III
Amber L. Eck
655 West Broadway, Suite 1900
San Diego, CA 92101
Attorneys for Ron Belec
Attn: John Fowler
Rew R. Goodenow
Holcomb Professional Bldg.
333 Holcomb Ave, Ste. 300
Reno, NV 89505
Attorneys for John M. Dodds, Richard Herrera, Aubrey Johnson, Charles
J. Bayer, John P. Brogan, and James J. Grogan
Attn: Thomas R. C. Wilson
100 West Liberty Street, 10th Floor
P.O. Box 2670
Reno, NV 89505-2670
Attorneys for Edward Shoen, James P. Shoen, and William E. Carty
Attn: Jack Londen
Melvin Goldman
425 Market Street
San Francisco, CA 94105-2482
Attorneys for AMERCO
Attn: Mark R. McDonald
444 W. Fifth Street, Ste. 3500
Los Angeles, CA 90013-0124
Attorneys for AMERCO
5335 Kietzke Lane,
Suite 220
Reno, NV 89511
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Attn: Walter J. Robinson
Theodore Keith Bell
2475 Hanover Street
Palo Alto, CA 94304
Attorneys for Defendants Edward J. Shoen, James P. Shoen, and William E. Catty
Attn: James Ryan
Deanna Peck
Renaissance One
Two North Centrl Avenue
Phoenix, Arizona 85004-2391
Attorneys for Defendants Edward J. Shoen, James P. Shoen, and William E. Carty
Attn: Brian Robbins
610 W. Ash Street, #1800
San Diego, CA 92101
Attorneys for Ron Belec
Attn: Mark A. Nadeau
Brian A. Cabianca
Two Renaissance Square
40 North Central Avenue, Ste. 2700
Phoenix, AZ 85004-4498
Attorneys for SAC Defendants and Mark Shoen
/s/ Jeannie Brandes | ||||
An Employee of LEWIS AND ROCA LLP | ||||
5335 Kietzke Lane,
Suite 220
Reno, NV 89511
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MARTHA J. ASHCRAFT
Nevada State Bar No. 1208
JAMES E. BERCHTOLD
Nevada Bar. No. 5874
LEWIS AND ROCA LLP
3993 Howard Hughes Pkwy, Suite 600
Las Vegas, Nevada 89109
Telephone: (702) 949-8200
Facsimile: (702)949-8352
IN AND FOR THE COUNTY OF WASHOE
PAUL F. SHOEN et al, | Case No. CV02-05602 | ||
Plaintiffs | |||
Consolidated with: (1) Case No. CV02-06331; | |||
(2) Case No. CV03-02486; and (3) Case No. | |||
CV03-02617 | |||
vs. | |||
SAC HOLDING CORPORATION et al, Defendants | |||
Dept. No. B6 | |||
AMENDED CONSOLIDATED VERIFIED STOCKHOLDERS’ | |||
DERIVATIVE COMPLAINT FOR DAMAGES AND EQUITABLE RELIEF | |||
COMPLAINT FOR DAMAGES AND EQUITABLE RELIEF
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INTRODUCTION | 1 | |||||||||||||||
JURISDICTION AND VENUE | 2 | |||||||||||||||
PARTIES | 3 | |||||||||||||||
FACTUAL ALLEGATIONS | 6 | |||||||||||||||
I. | AMERCO AND ITS SUBSIDIARIES | 6 | ||||||||||||||
II. | THE SAC ENTITIES | 8 | ||||||||||||||
III. | AMERCO’S TRANSACTIONS WITH THE SAC ENTITIES | 10 | ||||||||||||||
A. | AMERCO’s Sells Self-Storage Properties To The SAC Entities At Unfairly Low Prices | 10 | ||||||||||||||
B. | Amerco Finances The Acquisition Of Self-Storage Properties For The SAC Entities | 14 | ||||||||||||||
C. | The SAC Entities’ Exploit AREC And U-Haul’s Human Resources To Locate And Acquire Self-Storage Properties | 16 | ||||||||||||||
D. | The SAC Entities Use U-Haul To Operate A Competing Self- Storage Business Under The U-Haul Trade Name | 17 | ||||||||||||||
IV. | THE INDIVIDUAL DEFENDANTS’ INVOLVEMENT | 18 | ||||||||||||||
A. | Defendants Orchestrated AMERCO’s Transactions With The SAC Entities Through Their Roles With AMERCO’s Subsidiaries | 18 | ||||||||||||||
B. | AMERCO’s Deficient Public Filings From 1995 Through 2002 Concealed The Nature And Magnitude Of The Transactions With The SAC Entities | 21 | ||||||||||||||
V. | DEMAND ON AMERCO’S BOARD OF DIRECTORS WOULD BE FUTILE | 28 | ||||||||||||||
A. | A Majority Of The Board Has A Material Interest In The Subject Of The Demand | 29 | ||||||||||||||
1. | JOE and JAMES SHOEN Have a Material Interest in the Demand | 29 | ||||||||||||||
2. | BAYER has a Material Interest in the Demand | 30 | ||||||||||||||
3. | CARTY has a Material Interest in the Demand | 31 | ||||||||||||||
4. | DODDS has a Material Interest in the Demand | 33 | ||||||||||||||
5. | BROGAN and GROGAN Have a Material Interest in the Demand | 34 |
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B. | The AMERCO Board Is Not Independent Of The Shoen Insiders | 35 | ||||||||||||||
1. | The Issuance of Stock to Five “Key” Employees | 35 | ||||||||||||||
2. | JOE and MARK SHOEN Misappropriated AMERCO Resources to Prosecute a Defamation Action | 37 | ||||||||||||||
3. | The Manipulation of Shareholder Voting Procedures | 38 | ||||||||||||||
4. | JOE SHOEN’s Treatment of Those Who Have Opposed Him | 39 | ||||||||||||||
5. | Other Instances of the Shoen Insiders Engaging in Self-Dealing | 40 | ||||||||||||||
6. | A Former Board Member Personally Witnessed JOE SHOEN’s Control Over the AMERCO Board | 41 | ||||||||||||||
C. | AMERCO’s Dealings With The SAC Entities AreUltra Vires | 41 | ||||||||||||||
PRAYER FOR RELIEF | 50 |
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1 | The Shoen Insiders have taken further steps to solidify their control over AMERCO since this Complaint originally was filed in 2002. In June 2006, JOE SHOEN, JAMES SHOEN, MARK SHOEN, and the Trustees of the Shoen Irrevocable Trust and the Irrevocable “C” Trust, which collectively own 50.0004% of AMERCO’s common stock, entered into a Stockholder Voting Agreement. The Stockholder Voting Agreement grants James Shoen a proxy to vote each party’s shares. Thus, the Shoen Insiders no longer need to rely upon the votes of the ESOP Trust to exercise majority voting control over AMERCO. | |
2 | As noted above, although the composition of the U-Haul and AREC Boards of Directors changed over time between 1994 and 2002, the individually-named Defendants comprised a majority of both Boards of Directors at all times relevant to this lawsuit. |
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II. | THE SAC ENTITIES |
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(1) | AMERCO sold its existing self-storage facilities to the SAC Entities at unfairly low prices; | ||
(2) | AMERCO identified self-storage facilities owned by third parties, and facilitated and financed the SAC Entities’ purchase of the self-storage properties; and | ||
(3) | AMERCO identified parcels of raw land, developed them into lucrative self-storage facilities and then sold them to the SAC Entities |
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(1) | Sale agreements through which AMERCO has sold existing, mature self-storage facilities to the SAC Entities at below-market prices; | ||
(2) | Loan agreements through which AMERCO has provided hundreds of millions of dollars in non-recourse financing to facilitate the SAC Entities’ acquisition and development of the self-storage properties; and | ||
(3) | Management agreements, pursuant to which U-Haul has developed and currently operates the SAC Entities’ self-storage properties under the U-Haul trade name. |
A. | AMERCO Sells Self-Storage Properties To The SAC Entities At Unfairly Low Prices |
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(1) | The location of the storage facilities near U-Haul Centers, where potential customers go to pick up and drop off moving vehicles; | ||
(2) | The goodwill associated with use of the U-Haul trade name; and | ||
(3) | The increase in value which a new self-storage facility experiences when it is “leased” by the developer, U-Haul (discussed below) |
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B. | Amerco Finances The Acquisition Of Self-Storage Properties For The SAC Entities |
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subsidiaries, the holders of the non-recourse loans.
C. | The SAC Entities’ Exploit AREC And U-Haul’s Human Resources To Locate And Acquire Self-Storage Properties |
3 | These properties are located at the following addresses: (1) 1600 Highland Ave., Chester, Pennsylvania, (2) 3900 Whitetire Road, Landover, Maryland, (3) 8501 Snouffer School Road, Gaithersburg, Maryland, (4) 3995 Westfax Drive, Chantilly, Virginia, (5) 14523 Telegraph Road, Woodbridge, Virginia, (6) 311 N. Polk Street, Pineville, North Carolina, (7) 144 Dodd Street, Marietta, Georgia, (8) 7242 Georgia Highway 85, Riverdale, Georgia, (9) 5390 Old National Highway, Atlanta, Georgia, (10) 7803 North Orange Blossom, Orlando, Florida, (11) 3850 Cleveland Avenue, Columbus, Ohio, (12) 255 Remington, Bolinbrook, Illinois, (13) 4100 West Fullerton Avenue, Chicago, Illinois, (14) SW Kathryn Lane & Highway 121, Piano, Texas, (15) 2455 West Tarrant Road, Grand Prairie, Texas, (16) W IH 20 E of SH 360, Grand Prairie, Texas, (17) 3401 Alma Road, Richardson, Texas, (18) 1245 South Beckley Avenue, DeSoto, Texas, (19) 11383 Amanda Lane, Dallas, Texas, (20) Route 10 SW State Highway 114, Roanoke, Texas, (21) 1750 East County Line Road, Littleton, Colorado, (22) 500 North Scottsdale, Tempe, Arizona, (23) 3450 South 40th Street, Phoenix, Arizona, (24) SE Center of Frye & Price Road, Chandler, Arizona, (25) 3527 Ivar, Rosemead, California, (26) 6414 44thStreet, Sacramento, California, (27) 11705-07 82nd Avenue, Portland, Oregon, and (28) Highway 99 & North of 148th Street SW, Lynnwood, Washington. |
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D. | The SAC Entities Use U-Haul To Operate A Competing Sell-Storage Business Under The U-Haul Trade Name |
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U-Haul a “management fee,” equal to six percent of the “gross revenue” generated from the self-storage property. The remainder of the revenue generated by the self-storage property,i.e.,94% of the total gross revenue — is kept by MARK SHOEN and the SAC Entities.
IV. | THE INDIVIDUAL DEFENDANTS’ INVOLVEMENT |
A. | Defendants Orchestrated AMERCO’s Transactions With The SAC Entities Through Their Rotes With AMERCO’s Subsidiaries |
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B. | AMERCO’s Deficient Public Filings From 1995 Through 2002 Concealed The Nature And Magnitude Of The Transactions With The SAC Entities |
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(1) | Net income fell precipitously in fiscal 2001, from $12.9 million to $1 million, and from $65.5 million to $63.2 million in fiscal 2000; | ||
(2) | Earnings per share were negative in fiscal 2001 (a loss of $0.56 a share) and fiscal 2002 (a loss of $0.49 a share); | ||
(3) | Liabilities jumped from $2.7 billion to $3.1 billion in fiscal 2001, and from $2.5 billion to $2.7 billion in fiscal 2000, which increased AMERCO’s leverage, including off-balance sheet leases and SAC debt, from 3.21x at March 31, 2002, excluding the SAC liabilities, to 4.14x at March 31, 2002, including the SAC liabilities; and | ||
(4) | Stockholders’ equity dropped by $153 million, from $612 million to $512 million in fiscal 2001 and from $585 million to $532 million in fiscal 2000. |
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V. | DEMAND ON AMERCO’S BOARD OF DIRECTORS WOULD BE FUTILE |
4 | After this action originally was filed, AMERCO announced (in connection with its fiscal year 2004 financial results) that it had “deconsolidated” its financial statements from those of the SAC Entities. The properties which AMERCO transferred to the SAC Entities, however, remain with the SAC Entities. To date, AMERCO has not received adequate consideration for the self-storage properties or use of AMERCO’s resources and goodwill. |
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A. | A Majority Of The Board Has A Material Interest In The Subject Of The Demand. |
1. | JOE and JAMES SHOEN Have a Material Interest in the Demand |
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2. | BAYER has a Material Interest in the Demand |
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3. | CARTY has a Material Interest in the Demand |
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4. | DODDS has a Material Interest in the Demand |
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5. | BROGAN and GROGAN Have a Material Interest in the Demand |
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B. | The AMERCO Board Is Not Independent Of The Shoen Insiders |
1. | The Issuance of Stock to Five “Key” Employees |
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2. | JOE and MARK SHOEN Misappropriated AMERCO Resources to Prosecute a Defamation Action |
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3. | The Manipulation of Shareholder Voting Procedures |
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4. | JOE SHOEN’s TreatmentofThose Who Have Opposed Him |
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5. | Other Instances of the Shoen Insiders Engaging in Self-Dealing |
operated by MARK SHOEN, MARK SHOEN’s daughter and JOE SHOEN’s sons. Form Builders earns all of its revenue through contracts with U-Haul. There is no competitive bidding, process nor review and approval of these agreements by independent directors or auditors.
suspiciousness of U-Haul’s dealings with Form Builders and the size of these related-party transactions, AMERCO has failed to disclose any details regarding these agreements. In fact, it is unclear from AMERCO’s public filings what “printing” U-Haul purchases from Form
Builders,
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6. | A Former Board Member Personally Witnessed JOE SHOEN’s Control Over the AMERCO Board |
C. | AMERCO’s Dealings With The SAC Entities AreUltra Vires |
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AMERCO’s Articles of Incorporation in three different ways. First, AMERCO’s SEC filings admit a prohibited sale of assets to AMERCO in violation of Section (B) of Article 11. As noted above, on September 28, 2001, AMERCO purchased nine self-storage properties from the SAC Entities for $35.2 million. This transaction was an obvious “sale to ... this corporation[i.e.,
AMERCO] of assets of an Interested Stockholder,” Nevertheless, no shareholder approval of the sale was sought or obtained.
5 | See Nev, Rev. Stat § 78,412 (defining “affiliate” as “a person that directly, or indirectly through one or more intermediaries, is controlled by, or is under common control with a specified person ”); Nev, Rev Stat. § 78,413 (defining “affiliate” as “[a]ny corporation or organization of which that person is an officer or partner or is, directly or indirectly, the beneficial owner of 10 percent or more of any class of voting shares.”). |
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136. Second, the transactions between AMERCO and the SAC Entities have resulted in a “combination” in violation of Subsection (A) of Article 11.6 In this case, AMERCO has sold over $500 million worth of self-storage properties to MARK SHOEN and the SAC Entities None of these transactions ever was presented to (much less approved by) AMERCO’s shareholders. |
137. Third, the “management agreements” between U-Haul and the SAC Entities violate Section (B) of Article 11 because they arede factoleases of the SAC Entities’ assets to AMERCO. Although title to the self-storage facilities is vested with the SAC Entities, the properties are operated by AMERCO in return for a fee equal to six percent of the gross rental revenue. The management agreements therefore constitute a “lease... with this corporation [i.e.,AMERCO] of any assets of any Interested Stockholder [i.e., Mark Shoen and the SAC Entities],” in violation of Subsection (B) of Article 11. None of the “management agreements” ever was approved by AMERCO’s shareholders. |
FIRST CAUSE OF ACTION Breach of the Fiduciary Duty of Loyalty (Against All Defendants) |
138. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 137, above. |
139. All Defendants (other than the SAC Entities) owe a duty of loyalty to AMERCO and its stockholders. That duty of loyalty requires them to act in the utmost good faith Where a director or officer has a self-interest in a transaction, the transaction must be fair and serve the best interests of the corporation and its stockholders.See N.R.S. § 78.140(2)(d) (“The circumstances in which a contract or other transaction is not void or voidable [are]... [t]he contract or transaction is fair as to the corporation at the time it is authorized or approved ”) |
6 Although Article 11 does not define “combination,” under Nevada law a “combination” includes “any sale or lease to an interested stockholder of assets of the corporation (a) having an aggregate market value equal to five percent or more of... the assets of the corporation, (b) having an aggregate market value equal to five percent or more of the... market value of all the outstanding shares of the corporation, or (c) representing 10 percent or more of the earning power or net income of the corporation.”See Nev. Rev. Stat. §78.416. |
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140. Defendant MARK SHOEN is an AMERCO Executive Officer who currently holds the title of President of U-Haul Phoenix Operations. He has a material self-interest in the transfers of AMERCO assets to the SAC Entities because he owns and controls the SAC Entities. Defendants JOE and JAMES SHOEN also have a self-interest in the transfers because they have retained an undisclosed pecuniary interest in the SAC Entities, and because they are MARK SHOEN’s brothers. |
141. The transfers of real estate from AMERCO to the SAC Entities are not fair and do not serve the best interests of AMERCO or its stockholders. The prices paid do not reflect the true value of the properties sold, and AMERCO resources are exploited in accomplishing the transfers. |
142. Defendants DODDS, CARTY, BAYER, HERRERA, JOHNSON, BROGAN and GROGAN breached their duty of loyalty by knowingly orchestrating, participating, facilitating and aiding and abetting the self-dealing transactions. Each of these Defendants helped the SAC Entities misappropriate AMERCO’s self-storage business and they knowingly signed misleading and incomplete public filings. In doing so, these Defendants elevated their loyalty to the Shoen Insiders over their loyalty to AMERCO and its shareholders. Moreover, Defendants DODDS, CARTY, BAYER, HERRERA, JOHNSON, BROGAN and GROGAN also failed to clarify years’ worth of incomplete and misleading public filings. As a result, it was impossible for Plaintiffs (and AMERCO’S other shareholders) to determine the nature and scope of Defendants’ self-dealing transactions. |
143. The SAC Entities are liable for aiding and abetting these breaches of fiduciary duties. The SAC Entities (acting through Defendant MARK SHOEN) knowingly participated in the breaches of fiduciary duties by facilitating the transfer of AMERCO’s assets at below-market prices, and by relying upon AMERCO’s extensive resources to develop and market properties to the detriment of AMERCO and its stockholders. |
144. Because the transfers of AMERCO real estate to SAC Entities were unfair and represent a breach of fiduciary duty by the Officers and Directors of AMERCO, Plaintiffs are |
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entitled to a judgment declaring all such transfers to be void and quieting title to the properties in AMERCO. |
145. Plaintiffs, AMERCO, and AMERCO’s other stockholders have been damaged by the Defendants’ breaches of the fiduciary duty of loyalty because those transactions have reduced the value of AMERCO and, accordingly, Plaintiffs’ stock. These misdeeds were intentional and thus warrant the imposition of personal liability on the individual Defendants for the damages they have caused. |
146. In breaching their fiduciary duties, Defendants JOE, MARK and JAMES SHOEN acted maliciously and fraudulently, and they oppressed AMERCO and its stockholders, thus warranting the imposition of exemplary and punitive damages. |
147. By reason of Defendants’ actions, AMERCO and its stockholders have suffered and continue to suffer irreparable injury consisting of past financial losses, future losses of the opportunity to profit from AMERCO’s position in the self-storage market, and the loss of the stockholders’ democratic rights. Plaintiffs have no adequate or speedy remedy at law for these irreparable injuries and therefore are entitled to injunctive relief. |
SECOND CAUSE OF ACTION Breach of the Fiduciary Duty of Loyalty: Usurpation of Corporate Opportunities (Against Mark Shoen) |
148. Plaintiffs incorporate by reference the allegations of paragraphs 1 through 137, above. |
149. In his capacity as an Executive Officer of AMERCO and U-Haul, MARK SHOEN learned of the self-storage real estate opportunities alleged herein. He failed to offer these opportunities to AMERCO, or caused AMERCO to reject them, even though he knew or should have known the opportunities would be of interest to AMERCO. He then usurped the opportunities for himself by causing the SAC Entities, which he purportedly owns and controls, to buy the properties. This usurpation of corporate opportunities is a breach of his fiduciary duty of loyalty. |
150. Plaintiffs, AMERCO, and AMERCO’s other stockholders have been damaged by MARK SHOEN’s breaches of fiduciary duty because the transactions with the SAC Entities. |
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Breach of Fiduciary Duty: Ultra Vires Acts
(Against All Defendants)
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Wrongful Interference with Prospective Economic Advantage
(Against all Defendants)
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Unjust Enrichment
(Against the SAC Entities)
Abuse of Control
(Against All Defendants)
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Dated: November 8, 2006 | LEWIS AND ROCA LLP MARTHA J. ASHCRAFT JAMES E. BERCHTOLD | |||
By: | /s/ Jasmine K. Mehta for (SBN 8188) | |||
JAMES E. BERCHTOLD |
3993 Howard Hughes Pkwy, Suite 600 Las Vegas, Nevada 89109 Telephone: (702) 949-8200 Facsimile: (702) 949-8352 Attorneys for Plaintiff Paul F. Shoen LATHAM & WATKINS LLP MARC W. RAPPEL (admittedpro hac vice) BRIAN T. GLENNON (admittedpro hac vice) 633 West Fifth Street, Suite 4000 Los Angeles, California 90071-2007 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 Attorneys for Plaintiff Paul F. Shoen ROBBINS UMEDA & FINK LLP BRIAN J. ROBBINS KELLY M. McINTYRE 610 West Ash Street, Suite 1800 San Diego, CA 92101 Telephone: (619) 525-3990 Facsimile: (619) 525-3991 Attorneys for Plaintiff Ron Belec |
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BECKLEY SINGLETON CHTD IKE L. EPSTEIN DANIEL F. POLSENBERG 1875 Plumas Sheet, Suite 1 Reno, Nevada 89509-3387 Telephone: (775) 823-2900 Facsimile: (775) 823-2929 Attorneys for Plaintiff Ron Belec BERMAN, DEVALERIO, PEASE, TABACCO, BURT & PUCILLO JOSEPH J. TABACCO, JR. CHRISTOPHER HEFFELFINGER 425 California Street, Suite 2025 San Francisco CA 94104 Telephone: (415) 433-3200 Facsimile: (415) 433-6382 Attorneys for Plaintiff Glenbrook Capital Limited Partnership HAROLD B. OBSTFELD P.C HAROLD B. OBSTFELD 260 Madison Avenue, 18th Floor New York, NY 10016 Telephone: (212) 696-1212 Facsimile: (212) 696-1398 Attorneys for Plaintiff Alan Kahn BECKLEY SINGLETON CHTD DAVID WASICK 1875 Plumas Street, Suite 1 Reno, Nevada 89509-3387 Telephone: (775) 823-2900 Facsimile: (775) 823-2929 Attorneys for Plaintiffs Glenbrook Capital Limited Partnership and Alan Kahn |
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EXHIBIT C Code: 2490 DANIEL HAYWARD (State Bar No. 5986) LAXALT & NOMURA, LTD. 9600 Gateway Drive Reno, Nevada 89521 Telephone: (775) 322-1170 Facsimile: (775) 322-1865 |
JACK W. LONDEN (Admitted Pro Hac Vice) MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Telephone: (415) 268-7000 Facsimile: (415) 268-7522 |
Attorneys for Nominal Defendant AMERCO |
FILED 2007 SEP 13 AM 10:56 RONALD A. LONGTIN, JR. BY J. Ames DEPUTY |
IN THE SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA IN AND FOR THE COUNTY OF WASHOE |
In re AMERCO DERIVATIVE LITIGATION Master File No. CV02-05602 Dept. No. 6 |
This Document Relates To: ALL ACTIONS |
NOMINAL DEFENDANT AMERCO’S MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT; MEMORANDUM OF POINTS AND AUTHORITIES |
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Page TABLE OF AUTHORITIES C-3 INTRODUCTION C-5 BACKGROUND AND CONCISE STATEMENT OF UNDISPUTED MATERIAL FACTS C-7 APPLICABLE STANDARDS C-8 ARGUMENT C-9 I. AMERCO’S STOCKHOLDERS HAVE RATIFIED THE CHALLENGED SAC TRANSACTIONS C-9 A. Nevada Law Empowers Stockholders to Ratify Self-Interested Transactions C-9 B. The Proxy Statement Disclosed the Fact of Mark Sheen’s and James Shoen’s Financial Interests in the SAC Transactions C-11 C. Holders of a Majority of AMERCO’s Stock Voted to Ratify the Challenged Transactions C-12 D. Because of Stockholder Ratification, the Business Judgment Rule’s Presumption of Good Faith Applies to the Transactions C-13 E. Plaintiffs Fail to Allege Facts That Could Overcome the Presumption of the Business Judgment Rule C-14 II. PLAINTIFF BELEC’S LETTER COMPLAINING ABOUT THE PROXY STATEMENT FAILED TO ACKNOWLEDGE WHAT NRS 78.140 PROVIDES C-16 CONCLUSION C-18 |
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TABLE OF AUTHORITIES |
Page(s) |
CASES |
Bonicamp v. Vazquez, 120 Nev. 377, 91 P.3d 584 (2004) 4 |
In re BHC Communs. S ’Holder Litig., 789 A.2d 1 (Del.Ch. 2001) 10 |
Cede & Co.v.Technicolor, 634 A.2d 345 (Del. 1993) 11Duff v. Lewis, 114 Nev. 564, 958 P.2d 82 (1998) 4,5 |
In re Gen. Motors Class H S’holders Litig., 734 A.2d 611 (Del. Ch. 1999) 9, 11 |
Kopicko v. Young, 114 Nev. 1333, 971 P.2d 789, (1998) 5 |
Lewis v. Vogelstein, 699 A.2d 327 (Del. Ch. 1997) 7 Occhiutov.Occhiuto, 97 Nev. 143, 625 P.2d 568 (1981) 5 |
Parnes v. Bally Entm’t Corp., 722 A.2d 1243 (Del. 1999) 11, 12 |
In re Santa Fe Pac. Corp. S’holder Litig., 669 A.2d 59 (Del. 1995) 1, 2, 7, s10 |
Shoen v. SAC Holding Corp., 137 P.3d 1171 (Nev. 2006) 1, 11 fn. 5 |
Skeen v. Jo-Ann Stores, Inc., 750 A. 2d 1170 (Del. 2000) 7 |
Solomon v. Armstrong, 747 A.2d 1098 (Del. Ch. 1998) 9, 11 |
Weinbergerv.UOP. Inc., 457 A.2d 701 (Del. 1983) 10 fn.4 |
In re Wheelabrator Techs., Inc. S’holders Litig.,663 A.2d 1194 (Del. Ch. 1995) 9 |
Whitev.Panic,783 A.2d 543 (Del. 2001) 11 |
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TABLE OF AUTHORITIES |
(continued) Page(s) Wood v. Safeway, |
121 P.3d 1026 (Nev. 2005) 5STATUTES & RULES |
Nev. Rev. Stat. § 78.138 11 |
§ 78.140passim Nev. R. of Civ. Proc. 12(c) 4 56(c) 5 8 Del. Code § 144(a)(2) 7, 8 OTHER AUTHORITIES S. Bill No. 148, ch. 220, Stats. of Nev.,45th Sess. (1951) 6 fn.1 Assem. Bill No. 112, ch. 94,Stats. of Nev., 55th Sess. (l969) 6 & fn.1 Nev.S. Judiciary Minutes,55th Sess. (1969) 6 |
Minutes of the Nev. State Leg., Joint S. & Assent. Comm. on the.,Judiciary,66th Sess. (1991) 6 Keith P. Bishop,The Delaware of the West: Does Nevada Offer Better |
Treatment for Directors than Delaware?,7 No. 3 Insights, 20 (1993) 10 |
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I. | AMERCO’S STOCKHOLDERS HAVE RATIFIED THE CHALLENGED SAC TRANSACTIONS. |
A. | Nevada Law Empowers Stockholders to Ratify Self-Interested Transactions. |
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1 | The amendment provided that transactions between the corporation and financially interested officers, as well as directors, could be ratified; and that a ratification vote requires only “a majority vote... of stockholdersholding a majority of shares.”Assem. Bill No. 112, ch. 94, Stats, of Nev., 55th Sess., at 113 (1969) (emphasis original). The previous language had required “a majority vote... of shareholders entitled to vote.” S. Bill No. 148, ch. 220, Stats. of Nev., 45th Sess., at 328 (1951). Before the 1969 change, approval by holders of an absolute majority of shares would have been required, even if the shares voted were lower. Significantly, either standard would be met by the August 20 vote. |
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B. | The Proxy Statement Disclosed the Fact of Mark Shoen’s and James Shoen’s Financial Interests in the SAC Transactions. |
2 | Of course, in weighing whether to ratify the SAC transactions, AMERCO stockholders were not limited to the Proxy Statement. Stockholders could have reviewed the Company’s reported results and they could have considered the performance of AMBRCO’s common stock price, which has increased more man 180% since the Company emerged from Chapter 11 protection. (Id. at ¶ 12.) |
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C. | Holders of a Majority of AMERCO’s Stock Voted Ratify the Challenged Transactions. |
3 | Based on the final official vote count, as set forth in Settles Aff. ¶6, without including their shares and assuming that all their shares held by brokers were voted in favor of the proposal (although some may have been voted “abstain” or not voted), the approval vote would have been at least 56% of other shares voted for or against the Stockholder Proposal. | |
4 | Over 14 million shares were voted in favor of ratification. (Settles Aff., Ex. C.) Plaintiff Ron Belec, by contrast, owns eight shares of AMERCO stock. (Settles Aff., Ex. G.) |
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D. | Because of Stockholder Ratification, the Business Judgment Rule’s Presumption of Good Faith Applies to the Transactions. |
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E. | Plaintiffs Fail to Allege Facts That Could Overcome the Presumption of the Business Judgment Rule. |
5 | Weinberger v. UOP, Inc.,457 A.2d 701, 703 (Del. 1983) (“where corporate action [involving a controlling shareholder] has been approved by an informed vote of a majority of the minority shareholders, we conclude that fee burden entirely shifts to the plaintiff to show that the transaction was unfair to the minority”). |
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6 | The Nevada Supreme Court has relied on Delaware cases regarding the business judgment rule and its procedural consequences. Shoen v. SAC Holding Corp., 137 P.3d 1178-79, and fns. 7-10, 12. |
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II. | PLAINTIFF BELEC’S LETTER COMPLAINING ABOUT THE PKOXY STATEMENT FAILED TO ACKNOWLEDGE WHAT NRS 78.140 PROVIDES. |
7 | The Complaint’s Third Cause of Action asserts that the SAC transactions were ultra vires because they had not been approved by the holders of two-thirds of the Company’s common stock. (Compl., ¶¶ 153-61.) Plaintiffs allege that such approval is required by Article 11 of the Company’s Articles of Incorporation. (Id.) This contention rests on a misinterpretation of what Article 11 covers. But even assuming Article 11 applied, fee approval of the Stockholder Proposal by the holders of 72% of the Company’s common stock exceeds the approval percentage in that provision. (Settles Aff., ¶ 6.) |
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Dated: September 12, 2007 | LAXALT & NOMURA, LTD. DANIEL HAYWARD JACK W. LONDEN (AdmittedPro Hac Vice) MORRISON & FOERSTER LLP | |||
By: | Daniel Hayward | |||
Attorneys for Nominal Defendant AMERCO | ||||
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exhibit d Code: 2645 MARTHA J. ASHCRAFT Nevada State Bar No. 1208 JAMES E. BERCHTOLD Nevada State Bar No. 5874 LEWIS AND ROCA LLP 3993 Howard Hughes Pkwy, Suite 600 Las Vegas, Nevada 89109 Telephone: (702) 949-8200 Facsimile: (702) 949-8352 |
MARC W. RAPPEL (admitted pro hac vice) BRIAN T. GLENNON (admitted pro hac vice) LATHAM & WATKINS LLP 633 West Fifth Street, Suite 4000 Los Angeles, California 90071-2007 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 |
Attorneys for Plaintiffs |
[Additional Counsel listed on signature page] |
IN THE SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA IN AND FOR THE COUNTY OF WASHOE |
In re AMERCO DERIVATIVE LITIGATION Case no.CV02-05602 Consolidated with: (1) Case No. CV02-06331; (2) Case No. CV03-02486; and (3) Case No. CV03-02617 |
This Document Relates to: ALL ACTIONS Dept. No. B6 |
PLAINTIFFS’ OPPOSITION TO DEFENDANT AMERCO’S MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT; PLAINTIFFS’ REQUEST FOR A CONTINUANCE TO TAKE LIMITED DISCOVERY PURSUANT TO NEV. R. CIV. P. 56(f) IN THE ALTERNATIVE |
LEWIS AND ROCA LLP 50 WEST LIbeRty Street, StE. 410 RENO. NV 89501 (775) 823-2900 |
PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT |
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Page I. INTRODUCTION D-6 II. FACTUAL BACKGROUND D-7 A.The Self-Dealing Scheme D-7 B.The Proxy and the Shareholder Vote D-7 III. STANDARD OF REVIEW D-11 IV. THE SHAREHOLDER VOTE IS INVALID BECAUSE THE PROXY FAILED TO DISCLOSE MATERIAL FACTS D-12 A. Defendants’ Independent Duty of Disclosure D-12 B. Defendants Failed to Disclose Multiple Material Facts in the Proxy D-13 V. DEFENDANTS’ ARGUMENTS REGARDING SECTION 78.140 AND THE BUSINESS JUDGMENT RULE ARE UNSUPPORTABLE D-15 A. Compliance With Section 78.140 Does Not Automatically Restore the Business Judgment Rule D-15 B. Defendants Bear the Burden of Establishing the Entire Fairness of the Challenged Transactions D-18 VI. IN THE ALTERNATIVE, THE COURT SHOULD CONTINUE THE MOTION AND PERMIT PLAINTIFFS TO CONDUCT LIMITED DISCOVERY D-20 VII. CONCLUSION D-21 |
LEWIS AND ROCA LLP 50 west LIBERTY Street, ste. 410 RENO, NV 89501 (775) 823-2900 |
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TABLE OF AUTHORITIES |
Page |
CASES |
Ameritrade, Inc.v. First Interstate Bank, 105 Nev. 696, 782 P.2d 1318 (1989) 7Arnoldv. Society for Sav. Bancorp, Inc., 650 A.2d 1270 (Del. 1994) 7Aviation Ventures, Inc.v. Joan Morris, Inc., 110 P.3d 59 (Nev. 2005) 7Bakerinkv. Orthopedic Assoc. Ltd., 94 Nev. 428, 581 P.2 d9 (1978) 7Beattyv.Bright, 318 F. Supp. 169 (S.D. Iowa 1970) 9Bershadv. Curtiss-Wright Corp., 535 A.2d 840 (Del. 1987) 8Carlsonv.Hallinan, 925 A.2d 506 (Del. Ch. 2006) 7,13Cinerama, Inc.v.Technicolor, Inc., 663 A.2d 1156 (Del. 1995) 15 |
Cohen v. Mirage Resorts, Inc., 119 Nev. l, 62 P.3d 720 (2003)7,8Dennisonv.Allen Group Leasing Corp., 110 Nev. 181,871 P.2d 288 (1994) 6Emerald Partners v. Berlin, 787 A.2d 85 (Del. 2001) 14 |
Fliegler v. Lawrence, 361 A.2d 218 (Del. 1976) 11 14 15Foster v. Arata, 74 Nev. 143, 325 P.2d 759 (1958) 13 |
Gottlieb v. Heyden Chemical Corp., 91 A.2d 57 (Del. 1952) 14 |
Halimi v. Blacketor, 105 Nev. 105, 770 P.2d 531 (1989) 15 |
LEWIS AND ROCA LLP 50 WEST LIBERTY STREET, STE. 410 REHO, NV 89501 (775) 823-2900 PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT |
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Hilton Hotels Corp. v. ITT Corp., 978 F. Supp. 1342 (D. Nev. 1997) 11 |
HMG/Courtland Properties v. Gray, 749 A.2d 94 (Del. Ch. 1999) 11 |
Inre General Motors Class H Shareholders Litig.,734 A.2d 611 (Del. Ch. 1999) 8In re Wheelabrator Tech., Inc. Sec. Litig., 663 A.2d 1194 (Del. 1995) 14 |
Kahn v. Lynch Comm. Sys., Inc., 638 A.2d 1110 (Del. 1994) 13 14Leavitt v. Leisure Sports Inc., 103 Nev. 81, 734 P.2d 1221 (1987) 7Lichtenberg v. Besicorp Group, Inc., 43 F. Supp. 2d 376 (S.D.N.Y. 1999) 8 9Marciano v. Nakash, 535 A.2d 400 (Del. 1987) 11Orman v. Cullman, 794 A.2d 5 (Del. Ch. 2002) 13Schmidt v. Washoe County, 159 P.3d 1099 (Nev. 2007) 6Shoen v. SAC Holding Corporation, 137 P.2d 1171 (Nev. 2006) 11 13Solomon v. Armstrong, 747 A.2d 1098 (Del. 1999) 13 14TSC Industs., Inc. v. Northway, Inc., 426 U.S. 438 (1976) 8 10Valeant Pharm. v. Jenrey, 921 A.2d 732 (Del. Ch. 2007) 11Weatherhead v. Griffin, 851 P.2d 993 (Idaho Ct. App. 1992) 8Western Industs., Inc. v. General Ins. Co., 91 Nev. 222, 533 P.2d 473 (1975) 7Zirn v. VLI Corp., 681 A.2d 1050 (Del. 1996) 7 |
LEWIS AND ROCA LLP 50 WEST LIBERTY STREET, STE. 410 REHO, NV 89501 (775) 823-2900 PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT |
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STATUTES AND RULES |
56 Del. Laws ch. 50 12 |
8 Del. C. § 144 10, 11, 12 8 Del. C. § 203(3) 15 |
8 Del. C. §242 8 |
N.R.S. §78.140 passim N.R.S. § 78.439(3) 15 |
N.R.S § 92A.120 7 |
Nev. R. Civ, P. 12(c) 6 |
Nev. R. Civ. P. 56 6,7 |
LEWIS AND ROCA LLP 50 WEST LIBERTY STREET, STE. 410 REHO, NV 89501 (775) 823-2900 PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT |
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I. | INTRODUCTION |
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II. | FACTUAL BACKGROUND |
A. | The Self-Dealing Scheme |
B. | The Proxy and the Shareholder Vote |
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• | The Proxy sought approval of “all” AMERCO transactions with the SAC Entities from 1992 through 2007, yet the Proxy did not disclose the terms of all such transactions. Instead, the Proxy merely contained a summary of certain transactions that Defendants selected.(Id.) | ||
• | The Proxy failed to disclose that the terms of AMERCO’s transactions with the SAC Entities never were reviewed or approved by an independent body, special committee or third party.(Id.) | ||
• | The Proxy referred to certain “independent appraisals,” but failed to identify who conducted and commissioned the appraisals, nor did it explain why some properties either never were appraised or were appraised over a yearafterthe properties were sold to the SAC Entities.(Id.) |
1 | Defendants have since conceded that the Special Committee was appointed solely to determine whether to include the “Stockholder Proposal” in the Proxy Statement.(SeeMotion, at 3.) Thus, it appears that the terms of AMERCO’s dealings with the SAC Entities still have never been analyzed nor approved by any independent body. |
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• | The Proxy described AMERCO’s dealings with the SAC Entities as part of a “strategic business plan.”(Idat 25.) Defendants failed to disclose why this so-called “strategic business plan” was never approved by the Board, or why the “strategic business plan” was never disclosed to shareholders in the 15 years sincethese transactions began. | ||
• | The Proxy failed to describe how the prices of the properties sold or the terms of the loans made to the SAC Entities were determined, or how AMERCO concluded that these terms were fair to the Company. The Proxy also did not disclose whether the properties were listed publicly for sale, were the subject of a competitive bidding process or, instead, were made available exclusively to the SAC Entities. |
2 | After Defendants filed the Proxy, Plaintiffs acknowledged that the increased disclosure of AMERCO’s transactions with the SAC Entities was a step in the right direction, but Plaintiffs informed Defendants that the disclosures surrounding the derivative litigation and the terms of the transactions with the SAC Entities were materially deficient.(SeeSettles Dec. at Ex. D.) Rather than respond to the merits of Plaintiffs’ concerns, Defendants requested proof of Plaintiff Ron Belec’s stock ownership.(Id.at Ex. E.) |
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III. | STANDARD OF REVIEW |
3 | Defendants have styled their motion as a “Motion for Judgment on the Pleadings or, in the Alternative, Summary Judgment.” However, pursuant to Nev. R. Civ. P. 12(c), a party may move for judgment on the pleadings only “after the pleadings are closed.” In this case, Defendants have not yet filed an answer, and therefore, a motion for judgment on the pleadings is premature. |
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IV. | THE SHAREHOLDER VOTE IS INVALID BECAUSE THE PROXY FAILED TO DISCLOSE MATERIAL FACTS |
A. | Defendants’ Independent Duty of Disclosure |
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B. | Defendants Failed to Disclose Multiple Material Facts in the Proxy |
4 | Nothing in Section 78.140 permits corporate fiduciaries to ignore their independent duty of disclosure and circumvent bedrock principles governing the shareholder voting process. Indeed, under Defendants’ interpretation of the law, the extent of a corporation’s disclosure obligations would turn on the identities of the parties to the transactions, and would require less disclosure regarding interested party transactions. Thus, the disclosure provisions of Section 78.140(2)(b) must be viewed as a necessary — but not sufficient — obligation for obtaining shareholder ratification of an interested party transaction. See, e.g., Weatherhead v. Griffin, 851 P.2d 993, 995 (Idaho Ct. App. 1992) (requiring interested directors to “fully and fairly disclose the facts surrounding [the interested] transactions” under a statute identical, in relevant part, to Section 78.140) |
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V. | DEFENDANTS’ ARGUMENTS REGARDING SECTION 78.140 AND THE BUSINESS JUDGMENT RULE ARE UNSUPPORTABLE |
A. | Compliance With Section 78.140 Does Not Automatically Restore the Business Judgment Rule |
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5 | Nevada generally follows Delaware in matters of corporate law. See, e.g., Shoen v. SAC Holding Corporation, 137 P.2d 1171, 1184 (Nev. 2006) (adopting Delaware’s standard for establishing demand futility); Hilton Hotels Corp. v. ITT Corp., 978 F. Supp. 1342, 1346 (D. Nev. 1997) (“Where, as here, there is no Nevada statutory or case law on point for an issue of corporate law, this Court finds persuasive authority in Delaware case law.”). |
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6 | While Defendants claim on one hand that Nevada rejected Delaware’s standards for evaluatinginterested director transactions, Defendants rely exclusively upon Delaware law in articulatingthe purported impact of shareholder approval and the application of the business judgment rule.(Motion, at 9.) Defendants cannot have it both ways. | |
7 | Notably, in 1951, when the Nevada legislature first enacted the predecessor statute to N.R.S.§ 78.140, Delaware had not yet enacted any law articulating the circumstances under which interested director transactions would not be void or voidable. Delaware first enacted such a statute in 1967 (56 Del. Laws ch. 50), 16 years later. (See Aff. Exs. I and J.) Thus, the languageof Nevada’s statute cannot be viewed as a “rejection” of Delaware law. |
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B. | Defendants Bear the Burden of Establishing the Entire Fairness of the Challenged Transactions |
PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT
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PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT
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VI. | IN THE ALTERNATIVE, THE COURT SHOULD CONTINUE THE MOTION AND PERMIT PLAINTIFFS TO CONDUCT LIMITED DISCOVERY |
8 | In addition to the deficient disclosures in the Proxy, and the limited impact of compliance with Section 78.140, Defendants’ arguments regarding Article 11 fail for an additional reason. (See Motion, at 2.) Article 11 provides, among other things, “[t]he affirmative vote of the holders of two-thirds (2/3) of the outstanding shares of common stock of this corporation entitled to vote shall be required to approve, adopt or authorize ... [a]ny agreements for the ... combination of this corporation with or into any other corporation which is an Interested Stockholder.” (Aff. at Ex. G at 7.) Plaintiffs have alleged that the transactions between AMERCO and the SAC Entities resulted in a “combination” in violation of Subsection (A) of Article 11. (Id. at Ex. A at 136.) Under both Nevada and Delaware law, the votes of an Interested Stockholder cannot be counted in approving a combination. See N.R.S. § 78.439(3) (“A combination [must be] approved by the affirmative vote of the holders of stock representing a majority of the outstanding voting power not beneficially owned by the interested stockholder ... or any affiliate or associate of the interested stockholder.”) (Emphasis added); 8 Del. C. § 203(3) (requiring the affirmative vote “of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder,”) (Emphasis added). Excluding the shares owned by the Shoen Insiders, the “Stockholder Proposal” did not acquire a 2/3 vote of the outstanding shares. |
PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT
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VII. | CONCLUSION |
Dated: November 6, 2007 | LEWIS AND ROCA LLP MARTHA J. ASHCRAFT JAMES E. BERCHTOLD | |||
By: | Illegible | |||
JAMES E. BERCHTOLD | ||||
3993 Howard Hughes Pkwy, Suite 600 Las Vegas, Nevada 89109 Telephone: (702) 949-8200 Facsimile: (702) 949-8352 Attorneys for Plaintiff Paul Shoen |
PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT
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LATHAM & WATKINS LLP | ||
MARC W. RAPPEL | ||
BRIAN T. GLENNON | ||
633 West Fifth Street, Suite 4000 | ||
Los Angeles, California 90071-2007 | ||
Telephone: (213) 485-1234 | ||
Facsimile: (213) 891-8763 | ||
Attorneys for Plaintiff Paul F. Shoen | ||
ROBBINS UMEDA & FINK LLP | ||
BRIAN J. ROBBINS | ||
610 West Ash Street, Suite 1800 | ||
San Diego, CA 92101 | ||
Telephone: (619) 525-3990 | ||
Facsimile: (619) 525-3991 | ||
Attorneys for Plaintiffs Ron Belec | ||
BERMAN, DEVALERIO, PEASE, | ||
TABACCO, BURT & PUCILLO | ||
JOSEPH J. TABACCO, JR. | ||
CHRISTOPHER HEFFELFINGER | ||
425 California Street, Suite 2025 | ||
San Francisco CA 94104 | ||
Telephone: (415) 433-3200 | ||
Facsimile: (415) 433-6382 | ||
Attorneys for Plaintiff Glenbrook Capital Limited Partnership | ||
HAROLD B. OBSTFELD P.C. | ||
HAROLD B. OBSTFELD | ||
260 Madison Avenue, 18th Floor | ||
New York, NY 10016 | ||
Telephone: (212) 696-1212 | ||
Facsimile: (212) 696-1398 | ||
Attorneys for Plaintiff Alan Kahn |
PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS/SUMMARY JUDGMENT
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Beckley Singleton, Chtd. | ||
Attn: Daniel F. Polsenberg | ||
Ike Lawrence Epstein | ||
530 Las Vegas Blvd, South | ||
Las Vegas, NV 89101 | ||
Attorneys for Ron Belec, Glenbrook Capital LP, and Alan Kahn | ||
Berman De Valerio Pease Tabacco Burt & Pucillo | ||
Attn: Joseph J. Tobacco Jr. | ||
Christopher T. Heffelfinger | ||
425 California Street, Suite 2025 | ||
San Francisco, CA 94104 | ||
Attorneys for Glenbrook Capital LP | ||
Harold B. Obstfeld P.C. | ||
Attn: Harold B. Obstfeld | ||
100 Park Avenue, 20th Floor | ||
New York, NY 10017-5510 | ||
Attorneys for Alan Kahn | ||
lrell & Manella LLP | ||
Attn: Charles Edward Elder | ||
Daniel Patrick Lefler | ||
David Siegel | ||
1800 Avenue of the Stars | ||
Suite 900 | ||
Los Angeles, CA 90067-4276 | ||
Attorneys for Charles Bayer, Aubrey Johnson. M. Frank Lyons, John P. Brogan, | ||
James J. Rogan, and John M. Dodds | ||
Latham & Watkins | ||
Attn: Mark W. Rappel | ||
Brian T. Glennon | ||
633 W. Fifth Street, Suite 4000 | ||
Los Angeles, CA 90071-2007 | ||
Attorneys for Plaintiff Paul F. Shoen |
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Law Offices of Bruce G. Murphy | ||
Attn: Bruce G. Murphy | ||
265 Liwyds Lane | ||
Vero Beach, FL 32963 | ||
Attorneys for Ron Belec | ||
Law Offices of Calvin R. X. Dunlap | ||
Attn: Calvin Dunlap | ||
691 Sierra Rose Dr., Ste. A | ||
P.O. Box 3689 | ||
Reno, NV 89505 | ||
Attorneys for SAC Defendants and Mark Shoen | ||
Law Offices of Peter D. Fischbein | ||
Attn: Peter D. Fischbein | ||
777 Terrace Avenue, 5th Floor | ||
Hasbrouck Heights, NJ 07604 | ||
Attorneys for M.S. Management Company, Inc. | ||
Laxalt & Nomura | ||
Attn: Daniel Hayward | ||
9600 Gateway Drive | ||
Reno, NV 89521 | ||
Attorneys for AMERCO | ||
Lerach Coughlin Stoia Geller Rudman & Robbins LLP | ||
Attn: William S. Lerach | ||
Travis E. Downs, HI | ||
Amber L. Eck | ||
655 West Broadway, Suite 1900 | ||
San Diego, CA 92101 | ||
Attorneys for Ron Belec | ||
Parsons Behle &. Latimer | ||
Attn: Rew R. Goodenow | ||
50 W. Liberty Street, Ste. 750 | ||
Reno, Nevada 89501 | ||
Attorneys for John M. Dodds, Richard Herrera, Aubrey Johnson, Charles J. Bayer, John P. Brogan, and James J. Grogan | ||
McDonald, Carano, Wilson LLP | ||
Attn: Thomas R. C. Wilson | ||
100 West Liberty Street, 10th Floor | ||
P.O. Box 2670 | ||
Reno, NV 89505-2670 | ||
Attorneys for Edward Shoen, James P. Shoen, and William E. Carty | ||
Morrison & Forester | ||
Attn: Jack Londen | ||
Melvin Goldman | ||
425 Market Street | ||
San Francisco, CA 94105-2482 | ||
Attorneys for AMERCO |
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Morrison & Forester LLP | ||
Attn: Mark R. McDonald | ||
555 W. Fifth Street, Ste. 3500 | ||
Los Angeles, CA 90013-0124 | ||
Attorneys for AMERCO | ||
Pillsbury Winthrop Shaw Pittman LLP | ||
Attn: Walter J. Robinson | ||
Theodore Keith Bell | ||
2475 Hanover Street | ||
Palo Alto, CA 94304 | ||
Admitted pro hac vice | ||
Attorneys for Defendants Edward J. Shoen, James P. Shoen, and William E. Carty | ||
Quarles & Brady, Streich & Lang | ||
Attn: James Ryan | ||
Deanna Peck | ||
Renaissance One | ||
Two North Centrl Avenue | ||
Phoenix, Arizona 85004-2391 | ||
Attorneys for Defendants Edward J. Shoen, James P. Shoen, and William | ||
E, Carty | ||
Umeda & Fink | ||
Attn: Brian Robbins | ||
610 W. Ash Street, #1800 | ||
San Diego, CA 92101 | ||
Attorneys for Ron Belec | ||
Squire Sanders & Dempsey LLP | ||
Attn: Mark A. Nadeau | ||
Brian A. Cabianca | ||
Two Renaissance Square | ||
40 North Central Avenue, Ste. 2700 | ||
Phoenix, AZ 85004-4498 | ||
Attorneys for SAC Defendants and Mark Shoen |
/s/ Anegla Shadrick | ||||
An Employee of Lewis AND ROCA LLP |
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Nevada State Bar No. 1208
JAMES E. BERCHTOLD
Nevada State Bar No. 5874
LEWIS AND ROCA LLP
3993 Howard Hughes Pkwy, Suite 600
Las Vegas, Nevada 89109
Telephone: (702) 949-8200
Facsimile: (702) 949-8352
BRIAN T. GLENNON (admittedpro hac vice)
LATHAM & WATKINS LLP
633 West Fifth Street, Suite 4000
Telephone: (213) 485-1234
Facsimile: (213) 891-8763
Plaintiff PAUL SHOEN
NEVADA IN AND FOR THE COUNTY OF WASHOE
In re AMERCO DERIVATIVE LITIGATION | Case No. CV02-05602 | ||
Consolidated with: | |||
(1) Case No. CV02-06331; | |||
(2) Case No. CV03-02486; and | |||
(3) Case No. CV03-02617 | |||
This Document Relates to: | |||
ALL ACTIONS | Dept. No. B6 | ||
OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS
OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT; PLAINTIFFS’ REQUEST
FOR A CONTINUANCE TO TAKE LIMITED DISCOVERY PURSUANT TO NEV. R.
CIV. P. 56(f) IN THE ALTERNATIVE
LEWIS AND ROCA LLP | AFFIDAVIT OF JAMES E. BERCHTOLD IN SUPPORT OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT | |
50West Liberty Street, STE 410 | ||
Reno,NV 89501 | ||
(775) 823-2900 |
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STATE OF NEVADA | ) | |||
) ss. | ||||
COUNTY OF CLARK | ) |
LEWIS AND ROCA LLP | AFFIDAVIT OF JAMES E. BERCHTOLD IN SUPPORT OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT | |
50West Liberty Street, STE 410 | ||
Reno,NV 89501 | ||
(775) 823-2900 |
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LEWIS AND ROCA LLP | AFFIDAVIT OF JAMES E. BERCHTOLD IN SUPPORT OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT | |
50West Liberty Street, STE 410 | ||
Reno,NV 89501 | ||
(775) 823-2900 |
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LEWIS AND ROCA LLP | AFFIDAVIT OF JAMES E. BERCHTOLD IN SUPPORT OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT | |
50West Liberty Street, STE 410 | ||
Reno,NV 89501 | ||
(775) 823-2900 |
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LEWIS AND ROCA LLP | AFFIDAVIT OF JAMES E. BERCHTOLD IN SUPPORT OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT | |
50West Liberty Street, STE 410 | ||
Reno,NV 89501 | ||
(775) 823-2900 |
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LEWIS AND ROCA LLP | AFFIDAVIT OF JAMES E. BERCHTOLD IN SUPPORT OF PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT | |
50West Liberty Street, STE 410 | ||
Reno,NV 89501 | ||
(775) 823-2900 |
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/s/ Jasmine K. Mehta | ||||
Jasmine K. Mehta, Esq. | ||||
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EXHIBIT E DANIEL HAYWARD (State Bar No. 5986) LAXALT & NOMURA, LTD. 9600 Gateway Drive Reno, Nevada 89521 Telephone: (775) 322-1170 Facsimile: (775) 322-1865 |
JACK W. LONDEN (Admitted Pro Hac Vice) MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105-2482 Telephone: (415) 268-7000 Facsimile: (415) 268-7522 |
Attorneys for Nominal Defendant AMERCO |
FILED Electronically 11-20-2007:01:39:52 PM Howard W. Conyers Clerk of the CourtTransaction # 90133 |
IN THE SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA IN AND FOR THE COUNTY OF WASHOE |
In re AMERCO DERIVATIVE LITIGATION Master File No. CV02-05602 Dept. No. 6 |
This Document Relates To: ALL ACTIONS |
NOMINAL DEFENDANT AMERCO’S REPLY MEMORANDUM IN SUPPORT OF MOTION FOR JUDGMENT ON THE PLEADINGS OR, IN THE ALTERNATIVE, SUMMARY JUDGMENT |
sf-2420684 |
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INTRODUCTION |
AMERCO’s stockholders voted overwhelming to ratify the transactions that plaintiffs have, for five years, tried to unwind. Although plaintiffs seek to reject this decision and insist on yet more litigation, NRS 78.140 gives stockholders the last word. The stockholders’ decision is entitled to enforcement and finality because AMERCO belongs to them. |
Plaintiffs concede that the August 2007 ratification complied with NRS 78.140. They do not dispute that the proxy more than satisfied the statute’s disclosure requirements and that stockholders holding a majority of AMERCO’s shares voted to endorse the transactions. |
Instead, plaintiffs offer two objections. First, they claim a challenged transaction may be ratified only if a proxy statement includes disclosures in addition to those required by NRS 78.140. The statute’s narrow requirements, however, reflect the Legislature’s determination to avoid precisely the sort of disclosure squabbles plaintiffs would provoke here. The Proxy Statement more than satisfied duties owed by the independent directors who reviewed it. |
Second, plaintiffs claim that the transactions remain subject to the entire fairness test, relying on interpretations of Delaware’s ratification statute. But Nevada, unlike Delaware, has enacted a statutory presumption that directors and officers act in good faith. NRS 78.138. Plaintiffs have relied on allegations of self-dealing to overcome this presumption. But NRS 78.140 provides that a majority vote by stockholders with notice of the fact of a director or officer financial interest eliminates the self-dealing issue, restoring the statutory presumption that the Company’s officers and directors acted in good faith. |
The 84% stockholder vote ratifying the SAC transactions with notice of the fact of financial interest on the part of Mark Shoen and James Shoen therefore leaves plaintiffs with only the assertion that the terms of the challenged transactions should have been more favorable to AMERCO. Disagreements about the soundness of business decisions, however, have never been sufficient to rebut the presumption of the business judgment rule. Accordingly, this litigation should be dismissed with prejudice. |
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ARGUMENT |
I. THE PROXY SATISFIED THE REQUIREMENTS OF NEVADA LAW. |
NRS 78.140(2)(b) requires disclosure of only “the fact” of an interested director or officer’s financial interest in a challenged transaction. AMERCO’s opening brief established that the Proxy Statement disclosed that Mark Shoen and James Shoen held financial interests in the transactions. Indeed, the Proxy Statement also included discussion of transaction terms, and provided copies of significant agreements. (AMERCO’s Mem. of P. & A. in Supp. of Mot. (“Mem.”) at 4.) |
Plaintiffs do not dispute this. But they complain that the Proxy Statement should have said more. (Pls. Opp. to Def. AMERCO’s Mot. (“Opp.”) at 7-10.) The Plaintiffs would require, among other things, a prediction of the Court’s ruling on this motion (Opp. at 3), a recitation of the allegations of plaintiffs’ complaint (id.), a discussion of the “potential benefits” of unwinding the transactions, (id. at 3-4), a discussion of the Special Committee’s review of the disclosures (id. at 4), and detailed descriptions of other, unspecified transaction terms, appraisals, and business plans. (Id.; see also id. at 9-10.) |
Although plaintiffs concede that NRS 78.140 requires none of these items,1 they assert that by permitting these omissions, the non-defendant directors on the Special Committee who reviewed the Proxy Statement violated Nevada fiduciary law.2 (Opp. at 7-8.) In support, plaintiffs cite a Delaware case, Carlson v. Hallinan, 925 A.2d 506 (Del. Ch. 2006), for the proposition that stockholder ratification requires approval by “fully-informed” stockholders.3 But |
1 Plaintiffs also incorrectly assert that “Defendants” sought the ratification. The Proxy Statement states that the proposal was made by a number of stockholder employees, and that management made no recommendation. In any event, the sponsorship of the proposal is irrelevant to any requirement of NRS 78.140. |
2 Although plaintiffs seek to understate the role of the Special Committee, they do not challenge the directors’ independence or disinterestedness. (Compare Opp. at 4 n.l with Settles Aff.¶ 4.) |
3 Plaintiffs rely on the Delaware rule requiring ratification by a “majority of the minority” stockholders. That rule was expressly rejected by the Nevada Legislature. But, contrary to plaintiffs’ bald assertion, a “majority of the minority” stockholders did approve the proposal here. There were 9,416,728 AMERCO shares not held by insiders and 4,919,005 of those shares were voted in favor of the proposal. (See Settles Aff. 6.) |
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4 | Plaintiffs assert that Nevada originally enacted what is now NRS 78.140 in 1951, and Delaware enacted Section 144 in 1967. (Opp. at 12 n.7). But they do not mention that Nevada amended and reenacted the section in 1969, 1989, 1991, 1993, 1997, and 2003. The 1969 amendment expanded the coverage of the statute from directors only to directorsand officers. (The 1969 amendment thus made the statute applicable to officers such as Mark Shoen.) The Senate Judiciary Committee said the following about this amendment: “AB 112 — Clarifies restrictions upon corporate transactions involving interested directors or officers. Mr. McDonald explained this merely liberalized the lawin allowing the officers and directors to operate more freely.” Nev. S. Judiciary Minutes,55th Sess., at 3 (1969) (emphasis added)), | |
5 | Nor did plaintiffs even make the assertion, before the vote, that the proposal was untimely. (SeeSettles Aff. Exs. D-G.) That determination was for the Board to make, relying on the Special Committee. It has nothing to do with the finality of the stockholder vote under NRS 78.140. In any event, if he believed the Proxy Statement to be deficient, Paul Shoen could have sought to enjoin the vote, a remedy he has sought in the past. Having failed to do so, he should not be heard to complain now. | |
6 | These complaints were, in any event, anticipated and disposed of in AMERCO’s opening brief.(SeeMem. at 12-14.) |
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II. | THE BUSINESS JUDGMENT PRESUMPTION OF VALIDITY DISPOSES OF THIS CASE. |
A. | The Presumption of the Business Judgment Rule Applies To Self-Dealing Transactions That Have Been Ratified. |
7 | Thus, plaintiffs’ cases concerning “partial” or “incomplete” disclosure are inapposite.(SeeOpp. at 7-8citing Leavitt v. Leisure Sports, Inc.,103 Nev. 81, 734 P.2d 122 (1987);W. Indus., Inc.v.Gen. Ins. Co.,91 Nev. 222, 533 P.2d 473 (1975);Arnold v. Soc. for Sav. Bancorp, Inc.,650 A.2d 1270 (Del. 1994),Zirn v. VLI Corp.,681 A.2d 1050 (Del. 1996);Cohen v. Mirage Resorts, Inc.,119 Nev. 1, 62 P.3d 720 (2003);In re Gen. Motors Class H S’holders Litig., 734 A.2d 611 (Del. Ch. 1999).) The dicta on which plaintiffs rely in the Idaho opinion,Weatherhead v. Griffin,851 P.2d 993 (Idaho Ct. App. 1992), is neither binding nor persuasive. |
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B. | Plaintiffs Fail to Plead Facts Overcoming the Business Judgment Rule. |
8 | Plaintiffs ignore that NRS 78.140 provides that fairness is analternativedefense to nullification, not a prerequisite. Specifically, the statute provides that a transaction may be ratified by a vote of the board of directors, a stockholder vote,ora showing that the“transaction is fair as to the corporation at the time it is authorized or approved.”NRS 78.140(2)(d) (emphasis added). Had the Legislature intended to make a showing of fairness mandatory for ratification, it could have easily done so. | |
9 | Plaintiffs complain that this motion is premature because the pleadings have not yet closed. (Opp. at 6 n.3.) Judicial economy could not possibly be served by deferring this motion. Indeed, the Court may treat this as a motion to dismiss or, as set out in AMERCO’s moving papers, a motion for summary judgment.SeeNev. R. Civ. P. 12(b)(5), 56(c). | |
10 | Plaintiffs insist that ratification does not cure the allegedly ultra vires nature of the transactions, which plaintiffs say violated Article 11 of AMERCO’s Articles of Incorporation. Plaintiffs claim that because the transactions “resulted in a ‘combination,’” defendants’ votes could not be counted. (Opp. at 15 n.8citingNRS 78.493(3).) Plaintiffs’ theory fails on several independent grounds. First, Article 11 does not disqualify certain stockholders from voting. Second, NRS 78.140(2)(b), which is the basis of AMERCO’s motion, explicitly allows them to vote and their votes to be counted. And finally, even applying the standards plaintiffs propose, plaintiffs fail to allege facts showing that any single sale, loan, or management agreement |
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III. | PLAINTIFFS’ PROPOSED DISCOVERY IS UNNECESSARY AND SHOULD BE REJECTED. |
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Dated: November 20, 2007 | LAXALT & NOMURA, LTD. DANIEL HAYWARD | |||
By: | Daniel Hayward | |||
Daniel Hayward | ||||
Attorneys for Nominal Defendant AMERCO | ||||
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Martha J. Ashcraft James Berchtold LEWIS AND ROCA LLP 3993 Howard Hughes Parkway, Suite 600 Las Vegas, NV 89109 Telephone: (702) 949-8200 Facsimile: (702) 949-8352 | Attorneys for Plaintiff Paul Shoen | |
Mark W. Rappel Brian T. Glennon LATHAM & WATKINS LLP 633 W. Fifth Street, Suite 4000 Los Angeles, CA 90071 Telephone: (213) 485-1234 Facsimile: (213) 891-8763 | Attorneys for Plaintiff Paul Shoen | |
Brian J. Robbins Kelly M. McIntyre ROBBINS UMEDA & FINK LLP 610 West Ash Street, Suite 1800 San Diego, CA 92101 Telephone: (619) 525-3990 Facsimile: (619) 525-3991 | Attorneys for Plaintiff Ron Belec | |
David C. McElhinney David W. Wasick BECKLEY SINGLETON 50 West Liberty Street, Suite 410 Reno, Nevada 89501 Telephone: (775) 823-2900 Facsimile: (775) 823-2929 | Attorneys for Plaintiff Ron Belec | |
Ike Lawrence Epstein Daniel Polsenberg BECKLEY SINGLETON 530 Las Vegas Blvd., South Las Vegas, Nevada 89101 Telephone: (702) 385-3373 Facsimile: (702) 385-9447 | Attorneys for Plaintiff Ron Belec |
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William S. Lerach Travis E. Downs, III Amber L. Eck LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 W. Broadway, Suite 1900 San Diego, CA 92101 | Attorneys for Ron Belec | |
Bruce G. Murphy LAW OFFICES OF BRUCE G. MURPHY 265 Llwyds Lane Vero Beach, FL 32963 | Attorneys for Plaintiff Ron Belec | |
Joseph J. Tabacco, Jr. Christopher Heffelfinger BERMAN, DEVALERIO, PEASE, TABACCO, BURT & PUCILLO 425 California Street, Suite 2025 San Francisco, CA 94104 Telephone: (415) 433-3200 Facsimile: (415) 433-6382 | Attorneys for Plaintiff Glenbrook Capital Limited Partnership | |
Harold B. Obstfeld HAROLD B. OBSTFELD P.C. 260 Madison Avenue, 18th Flr. New York, NY 10016 Telephone: (212) 696-1212 Facsimile: (212) 696-1398 | Attorneys for Plaintiff Alan Kahn | |
David Wasick BECKLEY SINGLETON CHTD. 1875 Plumas Street, Suite 1 Reno, NV 89509-3387 Telephone: (775) 823-2900 Facsimile: (775) 823-2929 | Attorneys for Plaintiffs Glenbrook Capital Limited Partnership and Alan Kahn | |
Charles E. Elder Daniel P. Lefler David Siegel IRELL & MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067-4276 | Attorneys for Defendants Charles Bayer, Aubrey Johnson, M. Frank Lyons, John P. Brogan, James R. Rogan, and John M. Dodds | |
Calvin Dunlap LAW OFFICES OF CALVIN R. DUNLAP 691 Sierra Rose, Ste. A P.O. Box 3689 Reno, NV 89505 | Attorneys for SAC Defendants and Mark Shoen |
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Rew R. Goodenow PARSONS, BEHLE & LATIMER 50 W. Liberty Street, Suite 750 Reno, Nevada 89501 | Attorneys for John M. Dodds, Richard Herrera, Aubrey Johnson Charles J. Bayer, John P. Brogan, and James J. Grogan | |
PAT LUNDVAL McDONALD CARANO WILSON LLP 100 West Liberty Street, 10th Floor P.O. Box 2670 Reno, Nevada 89505-2670 | Attorneys for Defendants Edward J. Shoen, James P. Shoen, and William E. Carty | |
Walter J. Robinson Theodore Keith Bell PILLSBURY WINTHROP SHAW PITTMAN LLP 2475 Hanover Street Palo Alto, CA 94304 | Attorneys for Defendants Edward J. Shoen, James P. Shoen, and William E. Carty | |
Mark A. Nadeau Brian A. Cabianca SQUIRE SANDERS & DEMPSEY LLP Two Renaissance Square 40 North Central Avenue, Suite 2700 Phoenix, AZ 85004-4498 | Attorneys for Mark Shoen and SAC Defendants | |
Peter D. Fishbein LAW OFFICES OF PETER D. FISCHBEIN 777 Terrace Avenue, 5th Floor Hasbrouck Heights, NJ 07604 | Attorneys for M.S. Management Company, Inc. | |
James Ryan Deanna Peck QUARLES & BRADY, STREICH & LANG Two North Central Avenue Phoenix, AZ 85004-2391 | Attorneys for Defendants Edward Shoen, James P. Shoen and William Carty |
/s/ Illegible | ||||
An Employee of Laxalt & Nomura, Ltd. | ||||
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COUNTY OF WASHOE, STATE OF NEVADA
Pursuant to NRS 239B.030
þ | Document does not contain the social security number of any person |
o | Document contains the social security number of a person as required by: |
o | A specific state or federal law, to wit: |
o | For the administration of a public program |
o | For an application for a federal or state grant |
LAXALT & NOMURA, LTD. | ||||
/s/ Daniel. T. Hayward | ||||
DANIEL T. HAYWARD 9600 Gateway Drive | ||||
Reno, Nevada 89521 Telephone: (775) 322-1170 Facsimile: (775) 322-1865 Attorneys for Nominal Defendant AMERCO | ||||
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Code 3370 | FILED DEC 17 2007 | |
HOWARD W CONYERS CLERK By: /s/ Illegible | ||
DEPUTY CLERK |
IN AND FOR THE COUNTY OF WASHOE
In re | ||
Case No. CV02-05602 | ||
AMERCO DERIVATIVE LITIGATION, | ||
Dept. No. 6 | ||
/ | ||
AND ALL RELATED MATTERS. | ||
/ |
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(2) Another corporation, firm or association in which one or more of its directors or officers are directors or officers or are financially interested;
voidable pursuant to subsection 1 are:
the stockholders, and they approve or ratify the contract or transaction in
1 | Plaintiffs contend the proxy should have informed the shareholders: (1) that the proposal was an attempt to dispose of this litigation and preclude the company from recovering funds from the SAC entities; (2) of potential the benefits of the litigation to the company; (3) why Plaintiffs believe the transactions were unfair; (4) of the specific terms of the disputed transactions; (5) that the transactions were not reviewed for fairness by an independent party; (6) how the terms of the disputed transactions were settled; and (7) that the SAC entities use the company’s employees and resources without compensating the company. |
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/s/ Brent Glenn | ||||
DISTRICT JUDGE | ||||
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CERTIFICATE OF SERVICE BY MAILING |
Pursuant to NRCP 5(b), I hereby certify that I am an employee of the Second Judicial District Court, in and for the County of Washoe; and that on this 17th day of December, 2007, I deposited in the County mailing system for postage and mailing with the United States Postal Service in Reno, Nevada, a true and correct copy of the attached document addressed as follows: |
Rew R. Goodenow, Esq. 333 Holcomb Avenue, Ste. 300 P.O. Box 2790 Reno, Nevada 89505 |
Daniel Hayward, Esq. Laxalt & Nomura, Ltd. 9600 Gateway Drive Reno, Nevada 89521 |
Thomas R. C. Wilson, Esq. Pat Lundvall, Esq. McDonald, Carano, Wilson LLP 100 West Liberty Street, 10th Floor P.O. Box 2670 Reno, NV 89505-2670 |
Calvin R. X. Dunlap, Esq. P.O. Box 3689 Reno NV 89505 |
Mark A. Nadeau, Esq. Squire Sanders & Dempsey LLP Two Renaissance Square 40 North Central Avenue Suite 2700 Phoenix, AZ 85004-4498 |
James A. Ryan, Esq. Quarles & Brady, Streich, Lang LLP Two North Central Avenue Phoenix, AZ 85004-2391 |
Martha J. Ashcroft, Esq. James E. Berchtold, Esq. Lewis & Rocha 3993 H. Hughes Parkway, #600 Las Vegas, NV 89109 |
Brian Robbins, Esq. Robbins Umeda & Fink 610 W. Ash Street, #1800 San Diego, CA 92101 |
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Christopher T. Heffelfinger, Esq. Berman Devalerio Pease Tabacco Burt & Pucillo 425 California St., #2025 San Francisco, CA 94104 |
Charles Edward Elder, Esq. Daniel Patrick Lefler, Esq. David Siegel, Esq. 1800 Avenue of the Stars Suite 900 Los Angeles, CA 90067-4276 |
Theodore Keith Bell, Esq. Walter J. Robinson, Esq. Pillsbury Winthrop Shaw Pittman LLP 2475 Hanover Street Palo Alto, CA 94304-1114 |
Brian T. Glennon, Esq. Marc W. Rappel, Esq. 633 W. Fifth St., Ste. 4000 Los Angeles, CA 90071 |
Harold B. Obstfeld, Esq. 260 Madison Avenue, 18th Floor New York, NY 10017 |
Bruce G. Murphy, Esq. 265 Llwyds Lane Vero Beach, FL 32963-3252 |
Peter D. Fischbein, Esq. Heights Plaza – 5th Floor 777 Terrace Avenue Hasbrouck Heights, NJ 07604 |
William S. Lerach, Esq. 655 West Broadway, Ste. 1900 San Diego, CA 92101 |
David C. McElhinney, Esq. Beckley, Singleton 50 W. Liberty St., Suite 410 Reno NV 89509 |
Daniel F. Polsenberg, Esq. Beckley, Singleton, Jemison Cobeaga & List, Chartered 530 S. Las Vegas Blvd. Las Vegas NV 89101 |
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David Wasick, Esq. Beckley, Singleton Chtd. 1875 Plumas St,. Ste. 1 Reno, NV 80509-3387 |
/s/ Heidi Boe Heidi Boe Administrative Assistant |
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EXHIBIT G |
Code 3370 FILED APR 07 2008 HOWARD W. CONYERS. CLERK By /s/ HOWARD W. CONYERSdeputy clerk |
IN THE SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA IN AND FOR THE COUNTY OF WASHOE |
In re Case No. CV02-05602 Dept. No. 6 |
AMERCO DERIVATIVE LITIGATION, |
/ |
AND ALL RELATED MATTERS. |
/ |
ORDER |
On November 8, 2006, Plaintiffs filed an amended consolidated derivative complaint, alleging Defendants’ improperly transferred certain self-storage properties (hereafter “the Property”), from Amerco to the SAC entities, for less than fair value. |
Defendants, Mark Shoen and the SAC entities filed a motion to dismiss. Defendants, Charles J. Bayer, John P. Brogan, John M. Dodds, James J. Grogan, Richard Herrera and Aubrey Johnson (collectively “the Outside Directors”) filed a motion to dismiss. Defendants, William Carty, Edward Shoen and James Shoen also filed a motion to dismiss. Plaintiffs filed oppositions. |
Claims Against Amerco |
With respect to Plaintiffs’ derivative claims against the officers and/or directors of Amerco, the Court finds the settlement stipulation, reached in the Goldwasser litigation, precludes Plaintiffs from bringing this action. |
Copy of original document on file with the Clerk of Court — Second Judicial District Court, County of Washoe, State of Nevada |
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The claims in the Goldwasser litigation were derivatively asserted by Plaintiffs, on behalf of Amerco. Thus, when the release was executed, the claims were released on behalf of Amerco. Plaintiffs, therefore, cannot relitigate said claims on behalf of Amerco. |
The Court finds the Goldwasser settlement released the claims which are the subject of this action. Under the settlement, which was the result of contested litigation, Amerco expressly agreed to release all claims “arising out of, relating to or in connection with” “the matters discussed in exhibit 2 [to the stipulation].” Exhibit 2 discusses: (1) Mark Shoen’s interest and involvement in the SAC entities; (2) the sale of the Property by Amerco to the SAC entities; (3) the valuation of the Property; (4) the sales price of the Property; and (5) the terms of the transactions. |
Plaintiffs, however, argue this action may proceed because the settlement expressly excluded “any claim either individual or derivative of any Amerco shareholder other than the Plaintiffs herein.” The Court finds this argument is without merit. The language “any claim,” must, necessarily, be read to mean “any other claim.” To hold otherwise would render the release meaningless, because it would prohibit only a small portion of the shareholders (the Plaintiffs of the Goldwasser litigation) from again raising said claims, while, at the same time, permitting each individual remaining shareholder to bring a new derivative action seeking to relitigate identical claims. Such an arrangement would be nonsensical and provide no benefit to Amerco as a settling party. |
The claims asserted derivatively on behalf of Amerco are the claims released by-Amerco in the Goldwasser action. Claims which Amerco released cannot be brought again on behalf of Amerco. |
Claims Against the SAC Entities |
With respect to Plaintiffs’ claims against the SAC entities, the Court finds Plaintiffs lack standing. |
Plaintiffs’ claims are derivative claims brought on behalf of Amerco. Amerco, however, participated in the challenged transactions and, therefore, cannot bring a claim |
Copy of original document on file with the Clerk of Court — Second Judicial District Court, County of Washoe, State of Nevada |
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against the SAC entities, based on the transactions. See in re Mediators, Inc., 105 F.3d 822 (2nd Cir, 1997)(“the Committee, suing on behalf of the [corporation], could not bring claims against third parties for facilitating a fraudulent transfer of assets, where the [corporation] also participated in the misconduct” and “[the corporation] has no standing to assert aiding-and-abetting claims against third parties for cooperating in the very misconduct that it had initiated”). |
Order |
Accordingly, Defendants motions to dismiss are granted. DATED: This 7th day of April, 2008. |
/s/ Brent Glenn DISTRICT JUDGE |
Copy of original document on file with the Clerk of Court — Second Judicial District Court, County of Washoe, State of Nevada |
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CERTIFICATE OF SERVICE BY MAILING |
Pursuant to NRCP 5(b), I hereby certify that I am an employee of the Second Judicial District Court, In and for the County of Washoe; and that on this 7th day of April, 2008, I deposited in the County mailing system for postage and malling with the United States Postal Service in Reno, Nevada, a true and correct copy of the attached document addressed as follows: |
Rew R. Goodenow, Esq. 333 Holcomb Avenue, Ste. 300 P.O. Box 2790 Reno, Nevada 89505 |
Daniel Hayward, Esq. Laxalt & Nomura, Ltd. 9600 Gateway Drive Reno, Nevada 89521 |
Thomas R. C. Wilson, Esq. Matthew Addison, Esq. McDonald, Carano, Wilson LLP 100 West Liberty Street, 10th Floor P.O. Box 2670 Reno, NV 89505-2670 |
Calvin R. X. Dunlap, Esq. P.O. Box 3689 Reno NV 89505 Brian A. Cablanca, Esq. Squire Sanders & Dempsey LLP Two Renaissance Square 40 North Central Avenue Suite 2700, Phoenix, AZ 85004-4498 |
James A. Ryan, Esq. Quarles & Brady, Streich, Lang LLP Two North Central Avenue Phoenix, AZ-85004-2391 |
Martha J. Ashcroft, Esq. James E. Berchtold, Esq. Lewis & Rocha 3993 H. Hughes Parkway, #600 Las Vegas, NV 89109 |
Brian Robbins, Esq. Robbins Umeda & Fink 610 W. Ash Street, #1800 San Diego, CA 92101 |
Copy of original document on file with the Clerk of Court — Second Judicial District Court, County of Washoe, State of Nevada |
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Joseph J. Tabacco, Jr., Esq. Christopher T. Heffelfinger, Esq. Berman Devalerio Pease Tabacco Burt & Pucillo 425 California St, #2025 San Francisco, CA 94104 |
Charles Edward Elder, Esq. Daniel Patrick Letter, Esq. David Siegel, Esq. 1800 Avenue of the Stars Suite 900 Los Angeles, CA 90067-4276 |
Theodore Keith Bell, Esq. Walter J. Robinson. Esq. Pillsbury Winthrop Shaw Pittman LLP 2475 Hanover Street Palo Alto, CA 94304-1114 |
Brian T. Glennon, Esq. Marc W. Rappel, Esq. 633 W. Fifth St., Ste. 4000 Los Angeles CA 90071 |
Harold B. Obstfeld, Esq. 100 Park Avenue., 20th Floor New York, NY 10017-5510 |
Bruce G. Murphy, Esq. 265 Llwyds Lane Vero Beach FL 32963-3252 |
Peter D. Fischbein. Esq., Heights Plaza — 5th Floor 777 Terrace’ Avenue Hasbrouck Heights, NJ 07604 |
William S. Lerach, Esq. 655 West Broadway, Ste. 1900 San Diego, CA 92101 |
David C. McElhinney, Esq. Beckley, Singleton 50 W. Liberty St, Suite 410 Reno NV 89509 |
Daniel F. Polsenberg, Esq. Beckley, Singleton, Jemison Cobeaga & List, Chartered 530 Las Vegas Blvd. South Las Vegas NV 89101 |
Copy of original document on file with the Clerk of Court — Second Judicial District Court, County of Washoe, State of Nevada |
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David Wasick, Esq. Beckley, Singleton Chtd. 1875 Plumas St,. Ste. 1 Reno, NV 80509-3387 |
Jack W. Londen, Esq. Morrison & Foerster, LLP 425 Market Street San Francisco, CA 94105-2482 |
Mark R. McDonald, Esq. Morrison & Foerster, LLP 555 West Fifth Street, Ste; 3500 Los Angeles, CA 90013-1024 |
/s/ Heldi Boa Heldi Boa Administrative Assistant |
Copy of original document on file with the Clerk of Court — Second Judicial District Court, County of Washoe, State of Nevada |
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Aaron Schafer | Dee McDowell | Lara Wesson | Richard Baranski | |||
Alan L. Weinstein | Dennis O’Connor | Laura Martins | Richard Zabriskie | |||
Amy Henning | Don Cichon | Linda Molina | Rodney McDowell | |||
Artie Tonan | Donald Cerimeli | Lindsay Pobieglo | Russ E. Johnson | |||
Bernice Owens | Francis Nebo | Loretta Wojtak | Salea Kinealy | |||
Bob Wesson | Greg Foster | Marie Barrows | Samuel Celaya | |||
Brian O’Loughlin | James Cain | Marlene Patton | Scott Lee | |||
Bruce Royer | Jean Covington | Mary Rivera | Scott Willson | |||
Burton Duy | Jeannie Neff | Matt Braccia | Sean Kelly | |||
Butch H. Greer | Jeff Jenkins | Michael G. Colman | Shirley Brown | |||
Carlos Vizcarra | Joanne Fried | Michael Kinealy | Silvia Hernandez | |||
Carol Young | JoAnne Sasser | Michael Saur | Steve Dudley | |||
Carolyn Hyduke | Joe Hemauer | Mike Wiram | Steven Berman | |||
Cilia Mallatte | John Homer | Mitzi Pack | Thomas Casey | |||
Cindy Lycans | John J. Sampson | Monica Calvillo | Thomas Dilgard | |||
Crystal Clark | John McCauley | Nobie Sanders | Thomas Prefling | |||
Dale Harpster | John Mikel | Olga Sanchez | Tom Coffee | |||
Danielle D. Lloyd | John Ungerer | Pamela Young | Tom Kardys | |||
David Coyle | Joseph Cook | Pat Fidazzo | Tom L. Stallings | |||
David Rose | Joy Hodge | Randy Engen | Vicki McAuliffe | |||
Dean Cerimeli | Kelie Budd-Hale | Renee Colman | ||||
Debi Slater | Kenneth Parker | Renee Royer |
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1. | Properties owned by subsidiaries of the Company were sold to SAC, generally in geographically diverse “groupings” of stabilized properties. Upon the sale of a property to SAC, such property ceased being an asset of the Company; similarly, the liabilities secured by the SAC-owned properties (the “SAC Properties”) are not liabilities of the Company. In total, the appraised values of the properties sold by the Company to SAC were approximately $615.9 million and selling prices were approximately $600.7 million. |
2. | Property management agreements were entered between Company subsidiary U-Haul International, Inc., or subsidiaries thereof (“U-Haul”) and SAC, pursuant to which U-Haul subsidiaries were hired to act as property managers for the SAC Properties. These agreements ensure that the SAC Properties are operated and maintained in accordance with U-Haul standards, and provide subsidiaries of the Company with management fee revenue. Management fees for fiscal years 2007, 2006 and 2005 were $23.5 million, $22.5 million and $14.4 million, respectively. |
3. | U-Haul independent dealer agreements were entered between subsidiaries of the Company and SAC, pursuant to which the SAC Properties act as U-Haul independent dealers for the rental of U-Haul equipment. These agreements have resulted in an expansion of the U-Haul dealer network. |
4. | Subsidiaries of the Company loaned money to SAC to finance SAC’s purchase of the SAC Properties, evidenced by promissory notes (the “SAC Notes”). Such SAC Notes have generally accrued interest at a rate of 8% to 9% per annum and require minimum monthly cash interest payments. |
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Name of SAC Entity | Appraised Values | Book Values | Sales Prices | |||||||||
24-25-26-27 | $ | 134,940,000 | $ | 65,260,000 | $ | 140,406,000 | ||||||
20-21-22-23 | 91,940,000 | 45,842,000 | 93,679,000 | |||||||||
18 | 44,805,000 | 29,743,000 | 43,782,000 | |||||||||
12-13-14 | 119,185,000 | 38,479,000 | 110,741,000 | |||||||||
6 | 91,270,000 | 40,421,000 | 99,686,000 | |||||||||
4-5 | 66,595,000 | 55,940,000 | 57,422,000 | |||||||||
1-2 | 67,200,000 | 54,425,000 | 54,955,000 | |||||||||
Total | $ | 615,935,000 | $ | 330,110,000 | $ | 600,671,000 |
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Management Fee | ||||
Fiscal Year | Received by U-Haul | |||
1996 | $ | 1,113,000 | ||
1997 | $ | 1,632,000 | ||
1998 | $ | 1,860,000 | ||
1999 | $ | 2,483,000 | ||
2000 | $ | 4,482,000 | ||
2001 | $ | 6,243,000 | ||
2002 | $ | 8,340,000 | ||
2003 | $ | 12,300,000 | ||
2004 | $ | 12,700,000 | ||
2005 | $ | 14,400,000 | ||
2006 | $ | 22,500,000 | ||
2007 | $ | 23,500,000 |
Dealer Commissions | ||||
Fiscal Year | Paid by U-Haul | |||
2002 | $ | 13,695,441 | ||
2003 | $ | 27,700,000 | ||
2004 | $ | 29,100,000 | ||
2005 | $ | 33,100,000 | ||
2006 | $ | 36,800,000 | ||
2007 | $ | 36,600,000 |
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2) | We are not members of any partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement, relationship, understanding, or otherwise, whether or not in writing, organized in whole or in part for the purpose of acquiring, owing or voting shares of AMERCO stock. | |
3) | The above shareholders have continuously held at least $2000.00 in market value of AMERCO shares and we intend to hold the stock through the date of the annual meeting. |
b. | Previous due diligence performed by independent third party consultants such as Price Waterhouse Cooper, SEC, BDO, Crossroads, Alvarez and Marcel and the bankruptcy court with the emergence from chapter. |
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3) | Belief that the suit will not increase shareholder value but will rather diminish value as a result of the estimated dollars that will be required to defend against the suit and in the company resources both human and otherwise that will be diverted from the primary business. |
• | if one of the circumstances specified in subsection 2 exists. |
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BRIAN J. ROBBINS* | 610 West Ash Street, Suite 1800 | STEVEN J, SIMERLEIN | ||
MARC M. UMEDA | San Diego, California 92101 | CAROLINE A. SCHNURER | ||
JEFFREY P. FINK | TELEPHONE(619) 525-3990 | MARK A. GOLOVACH | ||
FELIPE J.ARROYO | FACSIMILE(619) 525-3991 | LOUIS A. KERKHOFF | ||
GEORGE C. AGUILAR | SHANE P. SANDERS | |||
S. BENJAMIN ROZWOOD | REBECCA A. PETERSON | |||
KEVIN A. SEELY† | ASHLEY R. PALMER | |||
CRAIG W. SMITH | JILL E. KLEMANN | |||
DANIEL R. FORDE | ||||
ARSHAN AMIRI | ||||
JULIA M. WILLIAMS | ||||
GREGORY E. DEL GAIZO | ||||
*Admitted in CA & CT | ||||
†Admitted in CA,CNMI & Guam |
(415) 268-7522
(i) | accuses Plaintiffs without any basis of pursuing this litigation for “reasons that have nothing to do with the SAC Transactions” (Notice of Special Meeting, at 2); |
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May 29, 2008
Page 2
(ii) | makes incorrect assertions — on multiple occasions — about the number of shares Plaintiffs own, which is irrelevant to the underlying issues and is aimed at disparaging Plaintiffs and discrediting their motives(id.;see alsoDraft Proxy at11-12); |
(iii) | provides an inaccurate and misleading description of the shareholder vote on the so-called “Stockholder Proposal,” which was based upon insufficient disclosures and never was approved by a majority of the outstanding, disinterested shares (Notice of Special Meeting, at 2; Draft Proxy, at 6); |
(iv) | fails completely in its attempt to describe the potential benefits of this derivative litigation to AMERCO, and instead makes reference to the legal fees the Company has incurred, and states that “[i]f the Derivative Litigation is reinstated and the case goes forward... it is reasonable to expect that discovery, pretrial, trial, and appellate proceedings could continue for years”) (Draft Proxy, at 14); | |
(v) | attempts to further diminish the merits of this action by making repeated references to prior dismissals, which also are irrelevant, without explaining that one such dismissal was without prejudice and another wasreversedby the Nevada Supreme Court (not “reviewed and remanded”) (Draft Proxy, at 11); and | |
(vi) | even insinuates that Plaintiffs are responsible for AMERCO’s Chapter 11 bankruptcy, thereby costing the Company “$50.6 million in direct restructuring charges and tens of millions of dollars in other costs,” (Draft Proxy, at 12.) |
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cc: | Brian T. Glennon |
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AMERCO, a Nevada corporation | SAC Holding Corporation, a Nevada corporation | |||||
By: | /s/ Gary B. Horton | By: | /s/ Bruce Brockhagen | |||
Gary B. Horton, Treasurer | Bruce Brockhagen, Secretary and Treasurer |
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