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EXHIBIT 29
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
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David Rosenberg, :
:
Plaintiff, :
:
- against - :
:
E. HUBERT CLARK, JR., JOHN T. HORTON, :
ROBERT T. STEWART, STEPHANIE PACE : C.A. No. 14652
MARSHALL, GEORGE L. SCHUEPPERT, ROBERT :
J. DANIELS, JOHN E. JONES, EDWARD :
J. MOONEY, JR. ,ROBERT G. WALLACE, :
LEWIS E. AKIN, WILEYN. CALDWELL, ROBERT :
J. DAY, GARY E. MACDOUGAL, JOHN F. :
RIORDAN and CBI INDUSTRIES, INC., :
:
Defendants. :
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CLASS ACTION COMPLAINT
Plaintiff, by his attorneys, Rosenthal, Monhait, Gross & Goddess,
P.A., for his complaint against defendants, alleges upon information and belief,
except for paragraph 2 hereof which is alleged upon knowledge, as follows:
1. Plaintiff brings this action on his own behalf and as a class
action on behalf of all persons, other than defendants and those in privity with
them, who own the common stock of CBI Industries, Inc. ("CBI" or the "Company").
2. Plaintiff is and has been the owner of common stock of the Company
since prior to the wrongs herein complained of and continuously to date.
3. Defendant CBI is a corporation duly organized and existing under
the laws of the State of Delaware. The Company is
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a holding company with subsidiaries which provide contracting services such as
design, engineering, fabrication and project management. The Company also
produces and markets industrial and specialty gases, such as carbon dioxide,
oxygen, nitrogen and argon. Additionally, the Company assembles and sells
gas-related equipment and invests in a variety of companies related to the oil
industry.
4. The following individual defendants (the "Individual Defendants")
constitute the entire Board of Directors of CBI:
Name Position
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E. Hubert Clark, Jr. Director
John E. Jones Chairman, President and C.E.O.
John T. Horton Director
Stephanie Pace Marshall Director
George L. Schueppert Director, C.F.O.
Robert T. Stewart Director
Robert J. Daniels Director
Edward J. Mooney, Jr. Director
Robert G. Wallace Director
Lewis E. Akin Director
Wiley N. Caldwell Director
Robert J. Day Director
Gary E. MacDougal Director
John F. Riordan Director
5. The Individual Defendants named in paragraph 4 are in a fiduciary
relationship with plaintiff and the other public
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stockholders of CBI and owe them the highest obligations of loyalty, good
faith, due care, candor and fair dealing.
CLASS ACTION ALLEGATIONS
6. Plaintiff brings this action on his own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all holders of common stock of the Company (except defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
7. This action is properly maintainable as a class action.
8. The class is so numerous that joinder of all members is
impracticable. There are approximately 32,206,403 shares of CBI common stock
outstanding, owned by over 8,000 record shareholders scattered throughout the
country.
9. There are questions of law and fact which are common to the class
including, inter alia, the following: (a) whether defendants have breached their
fiduciary and other common law duties owed by them to plaintiff and the members
of the class; (b) whether defendants are unlawfully impeding a value maximizing
acquisition of the Company; (c) whether defendants' actions hereinafter
described, constitute a breach of the duty of fair dealing with respect to the
plaintiff and the other members of the
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class, a failure to maintain a level playing field and a failure to maximize
shareholder value; and (d) whether the class is entitled to injunctive relief as
a result of defendants' wrongful conduct.
10. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class. Plaintiff will fairly
and adequately represent the class.
12. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members not parties to the adjudications or substantially
impair or impede their ability to protect their interests.
13. The defendants have acted, or refused to act, on grounds generally
applicable to, and causing injury to, the Class and, therefore, preliminary and
final injunctive relief on behalf of the Class as a whole is appropriate.
SUBSTANTIVE ALLEGATIONS
14. Praxair, Inc. ("Praxair") has long been interested in acquiring
CBI. For the past six months, H. William Lichtenberg,
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Praxair's chairman and chief executive officer, has engaged in discussions with
defendant John E. Jones regarding a possible merger of the two companies. On
October 20, 1995 CBI terminated discussions concerning a possible merger.
15. On October 29, 1995, Praxair announced that it had made an
unsolicited merger proposal to CBI providing for the acquisition of 100 percent
of the common stock of CBI. Pursuant to the terms of the merger proposal,
Praxair would pay $32.00 in cash or Praxair common stock for every share of CBI
common stock. Praxair would also assume about $700 million of CBI's long term
debt. The total value of the transaction is approximately $2.1 billion.
16. Praxair's offer represents a hefty premium of 59 percent to the
$20.125 closing price of CBI common stock on Friday October 27, 1995. Praxair
also invited the board of directors of CBI to immediately commence negotiations
of a definitive merger agreement.
17. Defendants owe fundamental fiduciary obligations to the CBI
shareholders to take all necessary and appropriate steps to maximize the value
of their shares. In addition, the Individual Defendants have the responsibility
to act independently so that the interests of CBI public stockholders will be
protected, to seriously consider all bona fide offers for the company, and to
conduct fair and active bidding procedures or other mechanisms for checking the
market to assure that the highest possible price is achieved. Further, the
directors of the Company must adequately
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insure that no conflict of interest exists between defendants' own interests and
their fiduciary obligations to maximize stockholder value or, if such conflicts
exist, insure that all such conflicts will be resolved in the best interests of
the company's public stockholders.
18. The individual Defendants have breached their fiduciary and
other common law duties owed to Plaintiff and other members of the Class in that
they have not exercised and are not exercising independent business judgement
and have acted and are acting to the detriment of the Class. The defendants'
rejection of Praxair's offer is an uninformed knee jerk reaction made without
adequate information as to what Praxair would be prepared to offer in a fully
negotiated transaction, so that defendants can maintain their positions in
control of the company.
19. Moreover, Defendants have refused to take those steps
necessary to ensure that the Company's public shareholders will receive maximum
value for their shares of CBI common stock. Defendants' failure to accept
Praxair's offer to enter into a definitive merger agreement is clearly the
result of the desire by the individual Defendants to protect their own
substantial salaries, perquisites and positions with the Company.
20. The Individual Defendants have breached their fiduciary
duties by reason of the acts and transactions complained of herein, including
their failure to negotiate a value maximizing acquisition of CBI.
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21. Unless enjoined by this Court, the Individual Defendants will
continue to breach their fiduciary duties owed to plaintiff and the other
members of the class.
22. Plaintiff and the class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action;
B. ordering the Individual Defendants to carry out their fiduciary
duties to plaintiff and the other members of the class by announcing their
intention to:
1) cooperate fully with any person or entity having a bona fide
interest in proposing any transaction which would maximize shareholder value,
including, but not limited to, a buyout or takeover of the Company by Praxair;
2) undertake an appropriate evaluation of CBI's worth as a
merger/acquisition candidate;
3) take all appropriate steps to enhance CBI value and
attractiveness as a merger/acquisition candidate;
4) take all appropriate steps to effectively expose CBI to the
marketplace in an effort to create an active auction for CBI;
5) act independently so that the interests of CBI's public
stockholders will be protected; and
6) adequately ensure that no conflicts of interest exist between
the Individual Defendant's interests and their fiduciary obligation to maximize
stockholder value or, if
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such conflicts exist, ensure that all conflicts are resolved in the best
interests of CBI's public stockholders;
C. ordering the Individual Defendants, jointly and severally, to
account to plaintiff and the class for all damages suffered and to be suffered
by them as a result of the acts and transactions alleged herein;
D. awarding plaintiff the costs and disbursements of this action,
including a reasonable allowance for plaintiff's attorneys' and experts' fees;
and
E. granting such other and further relief as may be just and proper in
the premises.
Dated: October 30, 1995
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
By: /s/ Joseph A. Rosenthal
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First Federal Plaza, Suite 214
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
BERNSTEIN LIEBHARD & LIFSHITZ
274 Madison Avenue
New York, NY 10016
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