MILBERG WEISS BERSHAD
HYNES & LERACH
WILLIAM S. LERACH (68581)
SALLIE A. BLACKMAN (141830)
ERIN C. WARD (147063)
600 West Broadway, Suits 1800
San Diego, CA 92101
Telephone: 619/231-1058
- and -
JEFF S. WESTERMAN (94559)
355 S. Grand Avenue, Suite 4170
Los Angeles, CA 90071
Telephone: 213/617-9007
WEISS & YOURMAN
JOSEPH H. WEISS
319 Fifth Avenue
New York, NY 10016
Telephone: 212/532-4171 PRONGAY & MIKOLAJCZYK
- and - KEVIN M. PRONGAY (87010)
KEVIN J. YOURMAN (147159) EUGENE MIKOLAJCZYK (106929)
10940 Wilshire Blvd. 881 Alma Real Drive
24th Floor Suite 211
Los Angeles, CA 90024 Pacific Palisades, CA 90272
Telephone: 310/208-2800 Telephone: 310/573-3600
Attorneys for Plaintiff
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
HOWARD KAPLIN, Derivatively on ) No.
Behalf of FIRST INTERSTATE BANCORP, )
INC., ) (Derivative Action)
Plaintiff, )
vs. )
)
JOHN E. BRYSON, DON C. FRISBEE, ) VERIFIED DERIVATIVE
STEVEN B. SAMPLE, EDWARD M. CARSON, ) COMPLAINT FOR BREACH
GEORGE M. KELLER, FORREST N. ) OF FIDUCIARY DUTY,
SHUMWAY, JEWEL PLUMMER COBB, ) ABUSE OF CONTROL,
W.F. KIESCHNICK, WILLIAM B. SIART, ) UNJUST ENRICHMENT, AND
RALPH P. DAVIDSON, THOMAS L. LEE, )
RICHARD J. STEGEMEIER, MYRON DuBAIN, ) EQUITABLE RELIEF AND
WILLIAM F. MILLER, DANIEL M. TELLEP, ) DAMAGES
MAX MESSMER, FIRST BANK SYSTEM, INC. )
and JOHN F. GRUNDHOFER, )
Defendants. )
- and - )
)
FIRST INTERSTATE BANCORP, INC., a )
Delaware corporation )
) Plaintiff Demands A
Nominal Defendant. ) Trial By Jury
Plaintiff, as and for his complaint, alleges as follows
upon information and belief except as to paragraph 9, which is
alleged upon knowledge. Plaintiff's information and belief is
based upon, inter alia, the investigation made by plaintiff by
and through his counsel.
INTRODUCTION AND OVERVIEW
1. This is a stockholder derivative action seeking
equitable relief and compensatory damages as a result of a
"sweetheart" merger transaction, brought on behalf of First
Interstate Bancorp ("First Interstate" or the "Company"),
against First Interstate's top officers and the members of the
Board of Directors of First Interstate and First Interstate's
merger partner, First Bank System, Inc. ("First Bank") and its
Chairman/CEO, seeking to remedy violations of state law arising
out of these defendants' actions and conduct undertaken to
entrench First interstate management in derogation of their
duties to the Company. First Interstate's Board of Directors
has pursued a course of conduct through misuse and self-serving
allocation and waste of the Company's assets and resources
intended to and having the effect of making it extremely
difficult for any outside party to successfully acquire First
Interstate, even at prices well in excess of First Interstate
stock's historical price range. This course of conduct has
been undertaken by the defendants to secure and retain their
lucrative positions of power, prestige and profit with respect
to First Interstate and to enhance and aggrandize their own
interests at the expense of First Interstate.
2. On October 18, 1995, Wells Fargo, a highly successful,
profitable and well-capitalized bank, made an offer to acquire
First Interstate at a price far in excess of First Interstate's
then-market price, by exchanging in a tax-free exchange .625
shares of Wells Fargo stock for each share of First Interstate
stock, an offer worth $133.50 per share based on the October
17, 1995 closing price of Wells Fargo stock of $213.62 per
share. First Interstate's stock jumped from $106 per share to
$140 per share upon this announcement, while Wells Fargo's
stock increased to $228.65 per share, making the offer worth
$142.65 per First Interstate share. The defendants' response
was to reject the Wells Fargo bid without fully exploring the
extent of the bid and without allowing market forces to set the
price through an auction. The defendants rejected Wells
Fargo's bid even though Wells Fargo's CEO had let it be known
that he was willing to negotiate a higher price and thus to
offer a fair and reasonable price for First Interstate stock,
well above the levels at which the stock has traded
historically. First Interstate's investment adviser even
opined that the first proposal was "fair."
3. In recent years, defendants have consistently refused
to entertain highly favorable acquisition offers or overtures
for First Interstate. Defendants have done this to retain
their positions of prestige, power and profit, as they know
they will lose those positions in the event First Interstate is
acquired. Defendants' interests in holding on to their
positions of power, prestige and profit as officers and
directors of First Interstate far exceed their interests as
shareholders in First Interstate, as they collectively own only
about 144,000 of First Interstate's 75.7 million shares -- a
minuscule .001% of its outstanding stock. As a result, their
personal interests in maintaining their positions diverge from,
and are in conflict with, the best interests of First
Interstate.
4. The defendants took defensive steps to thwart the
Wells Fargo bid, or any higher bid by Wells Fargo or any other
suitor by engaging in the merger with First Bank ("First Bank
Transaction") even though: (a) they admittedly did not secure
First Bank's best offering price; (b) they did not fully
investigate or attempt to obtain Wells Fargo's best offer; (c)
they accepted and continue to support the First Bank
Transaction which was worth less than Wells Fargo's position in
negotiations and less than Wells Fargo's subsequent proposal on
November 13, 1995; (d) they are relying on defensive tactics
such as a lock-up fee and break up options which, in effect
impose a $200 million penalty on First Interstate or any other
bidder and they are wielding a "poison pill" to discourage
other bidders; and (e) First Bank is engaging in large
repurchases of its stock to support its stock price, and thus
artificially support the "value" of its stock exchange ratio in
the First Bank Transaction, to give the appearance that the
Transaction is more valuable than it really is, and because, as
stated by the head of First Bank, "If your stock tanks the
deal's over."
5. This action seeks to prevent the defendants from using
their positions to waste the assets of First Interstate and
enrich themselves at the expense of the Company. They should
be required to allow market forces to set the value of First
Interstate and conduct a fair and open auction to set the true
price of the Company. They should also be restrained from,
and/or held liable for any damages their actions are inflicting
upon First Interstate.
JURISDICTION AND VENUE
6. This Court has jurisdiction of this action pursuant to
28 U.S.C. SECTION 1332(a)(1). Plaintiff and all defendants are
residents and citizens of different states. The amount in
controversy between the plaintiff and the defendants exceeds
$50,000 exclusive of interest and costs. This is not collusive
action to confer jurisdiction on this Court which it would not
otherwise have.
7. Venue is proper in this District. Many of the acts
and transactions giving rise to the violations of law
complained of herein occurred in this District. The company
has its principal place of business in Los Angeles and certain
of the defendants reside in Los Angeles County.
8. In connection with the acts alleged in this complaint,
defendants, directly or indirectly, used the means and
instrumentalities of interstate commerce, including the mails
and interstate telephone and wire communications and the
facilities of the national securities markets.
PARTIES AND ACTORS
9. Plaintiff Howard Kaplin, the owner of shares of First
Interstate, is and was at all times relevant hereto a common
shareholder of First Interstate since prior to October 1995.
Plaintiff is a resident of New York and brings this action
derivatively on behalf of and for the benefit of First
Interstate, named as a nominal defendant in this action.
10. (a) First Interstate is a corporation with its
principal executive offices in Los Angeles, California and
which operates principally in California, as well as several
other western states. First Interstate is a bank holding
company. Although it is incorporated in Delaware it does not
do business or maintain offices in that state.
(b) At December 31, 1994, First Interstate owned 16
banks (the "Subsidiary Banks") which operated approximately
1,100 banking offices in 13 states, including California.
Ranked according to assets, the Company was the fourteenth
largest commercial banking organization in the United States at
December 31, 1994, having total deposits of $48.4 billion and
total assets of $55.8 billion.
(c) The Subsidiary Banks accept checking, savings
and other time deposit accounts and employ these funds
principally by making consumer, real estate and commercial
loans and investing in securities and other interest-bearing assets.
(d) The Company also provides banking-related
financial services and products. These include asset-based
commercial financing, asset management and investment
counseling, bank card operations, mortgage banking, venture
capital and investment products. It engages in these
activities both through non-bank subsidiaries of the Company
and through the Subsidiary Banks and their subsidiaries.
(e) The larger Subsidiary Banks provide
international banking services on a limited basis through the
international departments of their domestic offices. They also
maintain correspondent relationships with major banks
throughout the world.
11. (a) Defendant John E. Bryson ("Bryson") was a
director of First Interstate and Board Chairman and Chief
Executive Officer of SCEcorp and Southern California Edison
Company at all times relevant hereto.
(b) Defendant Don C. Frisbee ("Frisbee") was a First
Interstate director and Chairman Emeritus PacifiCorp at all
times relevant hereto.
(c) Defendant Steven B. Sample ("Sample") was a
First Interstate director and President of the University of
Southern California at all times relevant hereto.
(d) Defendant Edward M. Carson ("Carson") was a
member of the Board of First Interstate at all times relevant
hereto.
(e) Defendant George M. Keller ("Keller") was a
director of First Interstate and the retired Chairman and Chief
Executive Officer of Chevron Corporation at all times relevant
hereto.
(f) Defendant Forrest N. Shumway ("Shumway") was a
director of First Interstate and former Vice-Chairman of the
Board Allied-Signal, Inc. at all times relevant hereto.
(g) Defendant Jewel Plummer Cobb ("Cobb") was a
director of First Interstate and President Emeritus California
State University, Fullerton at all times relevant hereto.
(h) Defendant W.F. Kieschnick ("Kieschnick") was a
director of First Interstate and retired President and Chief
Executive Officer Atlantic Richfield Company at all times
relevant hereto.
(i) Defendant William B. Siart ("Siart") was
President and Chief Executive Officer First Interstate and a
director at all times relevant hereto.
(j) Defendant Ralph P. Davidson ("Davidson") was a
director of First Interstate and former Chairman of The John F.
Kennedy Center for the Performing Arts at all times relevant
hereto.
(k) Defendant Thomas L. Lee ("Lee") was a director
of First Interstate and Chairman and Chief Executive Officer
The Newhall Land and Farming Company at all times relevant
hereto.
(l) Defendant Richard J. Stegemeier ("Stegemeier")
was a director of First Interstate and Chairman of the Board
Unocal Corporation at all times relevant hereto.
(m) Defendant Myron DuBain ("DuBain") was a director
of First Interstate and retired Chairman and Chief Executive
Officer Fireman's Fund Corporation at all times relevant
hereto.
(n) Defendant William F. Miller ("Miller") was a
director of First Interstate and President Emeritus SRI
International at all times relevant hereto.
(o) Defendant Daniel M. Tellep ("Tellep") was a
director of First Interstate and Chairman and Chief Executive
Officer Lockheed Corporation at all times relevant hereto.
(p) Defendant Max Messmer ("Messmer") was a director
of First Interstate at all times relevant hereto. He is a
longtime friend of Siart and he was added to the board to
assist Siart in defeating any takeover proposals that would not
be in Siart's personal interest.
(q) Defendant First Bank System, Inc. ("First
Bank"), is a Delaware corporation with its principal offices in
Minnesota.
(r) Defendant John F. Grundhofer, ("Grundhofer") has
been the Chairman of the board of directors and Chief Executive
Officer of First Bank at all relevant times hereto.
12. Defendants named in paragraph 8(a) through (p)
(hereinafter collectively referred to as the "Director
Defendants") are each members of First Interstate's Board of
Directors.
13. The Director Defendants owed and owe First Interstate
fiduciary obligations and were and are required to: (i) use
their ability to manage First Interstate in a fair, just and
equitable manner; (ii) act in furtherance of the best interests
of First Interstate and its shareholders; (iii) act to maximize
the value of First Interstate and shareholder value; (iv)
govern First Interstate in such a manner as to utilize the
resources of the Company in a manner which benefits the Company
and its shareholders and not their personal interests or
preferences; (v) refrain from abusing their positions of
control, power, prestige and profit; and (vi) not favor their
own interests at the expense of First Interstate and its
shareholders. By reason of their fiduciary relationships,
these defendants owed and owe First Interstate the highest
obligation of good faith, fair dealing, loyalty and due care.
14. Wells Fargo is a corporation with its principal
executive offices in San Francisco, California. Wells Fargo is
a huge bank holding Company and one of the most well-managed,
profitable and well-capitalized banks in the United States.
With more than 600 branch outlets, 1,900 round-the-clock Wells
Fargo Express ATMs and a popular 24-hour telephone banking
service, Wells Fargo operates one of the largest and busiest
consumer banking businesses in the United States. Besides
serving as banker to some 3.5 million California households,
Wells Fargo provides a full range of banking services to
commercial, agribusiness, real estate and small business
customers, mainly in California. It is one of the nation's
leading managers of personal trust accounts, corporate 401(k)
plans and mutual funds, with approximately $57 billion in
assets under its management and administration.
15. Each Director Defendant, First Bank and Grundhofer
herein is sued individually as a participant and aider and
abettor in the wrongful activity, and the liability of each
arises from the fact that each has engaged in all or part of
the unlawful acts, plans, schemes, or transactions complained
of herein.
FACTUAL BACKGROUND OF THE WRONGDOING
The Director Defendants Reject Wells Fargo's First
Premium Offer Claiming That They Need Six Months To
Evaluate Their Options And Determine Their Strategy
16. As pleaded earlier, First Interstate is an interstate
banking corporation. First Interstate's stock performed poorly
in 1994 through mid-1995, due to First Interstate's lackluster
performance and perceptions that it was poorly managed. For
instance, First Interstate's stock traded at a high of $85 per
share and then fell, falling to a low of $67 per share in
December 1994. First Interstate did not reach $85 per share
again until mid-1995. After June 1995, First Interstate's
stock performed better, reaching over $100 per share in late
September 1995, due to an increase in the prices in bank stocks
generally and because of rumors that a favorable acquisition
offer for First Interstate would be forthcoming as part of the
wave of bank acquisitions and mergers now sweeping the United
States. However, even with this increase, First Interstate's
stock has been a relatively poor performer when compared to
other bank stocks. Because in recent years First Interstate
has not been viewed to be as well-managed as many other large
banks and thus has not performed as well in terms of many of
its key ratios and measurements of success as other banks, its
stock has not performed well and thus, shareholders in First
Interstate have, in recent years, obtained a below-industry
trendline or industry average return. The chart below shows
the price action of First Interstate stock in 1994-1995:
[The hardcopy Complaint filed with the Court contains a
Line graph showing the daily common stock price for First
Interstate for the period December 31, 1993 through October 17,
1995. Because the document for which this Complaint is an
Exhibit has been filed with the Securities and Exchange
Commission by electronic transmission, this graph is not
contained herein. The following information summarizes the
First Interstate daily closing stock price, plotted along the
graphs's vertical axis, for the dates indicated on the
horizontal axis of the graph:
Date Common Stock Price
--------- -------------------
December 31, 1993 64 1/8
March 25, 1994 77 7/8
June 17, 1994 75 3/4
September 9, 1994 79 1/4
December 2, 1994 69 3/8
February 24, 1995 81 3/8
May 19, 1995 81
August 11, 1995 87 1/2
October 17, 1995 106]
17. In recent years, certain other large financial
institutions have approached First Interstate with favorable
acquisition inquiries and offers. Some years ago, Bank of
America approached First Interstate about a possible
acquisition. Approximately a year ago, Wells Fargo approached
First Interstate about a possible acquisition of First
Interstate at a premium price. First Interstate's Board and
its top management have rejected and frustrated all of these
prior acquisition overtures and offers, even though those
offers would have resulted in First Interstate shareholders
receiving a substantial premium over the then-market price of
First Interstate stock. The Director Defendants have done this
because they know that in the event First Interstate is
acquired by another bank, most or all of the directors of First
Interstate will, either in connection with the acquisition or
shortly thereafter, be removed from the Board of the surviving
bank because their services will not be necessary and they will
be mere surplusage and thus such an acquisition would bring an
and to their positions of power, prestige and profit as
directors of this huge bank. At the same time, top managers
at First Interstate have caused these prior acquisition
overtures and offers to be rejected and/or frustrated, because
they also know that, in the event of an acquisition, they will
also lose their lucrative jobs and their positions of power,
prestige and profit as officers of a major banking institution.
In so acting, these defendants have been aggrandizing their own
personal positions and interests over that of First Interstate
and its broader shareholder community to whom they owe
fiduciary duties to bring about a sale of First Interstate on
favorable terms to all the shareholders, even if it results in
them losing their lucrative positions.
18. Shortly prior to October 18, 1995, Wells Fargo
approached First Interstate and offered to negotiate an
acquisition of First Interstate for a price far in excess of
First Interstate's current stock price. On October 17, 1995,
Paul Hazen ("Hazen"), Wells Fargo's Chief Executive Officer
("CEO"), called Siart and made a proposal for Wells Fargo to
acquire First Interstate. Siart rejected the approach and told
Hazen that he thought that it was in the best interest of
First Interstate to take six months or longer to consider
options, including a merger. In truth, Siart and/or First
Interstate's Board had determined that they would resist any
offer by Wells Fargo to buy the Company. On October 18, 1995,
Wells Fargo made an unsolicited acquisition offer for First
Interstate offering to exchange .625 shares of its stock for
each share of First Interstate stock, a $133.50 per share offer
based on the October 17, 1995 closing price of Wells Fargo
stock of $213.62 per share. Upon the announcement of this
favorable acquisition offer, First Interstate's stock instantly
skyrocketed from $106 per share to over $140 per share,
reflecting the extremely large premium being offered to First
Interstate shareholders in this tax-free exchange, and the
increase in Wells Fargo's stock price to $228.65 per share
making the offer worth $142.65 per First Interstate share.
Wells Fargo's offer to acquire First Interstate is
approximately three times First Interstate's book value, which
is a high offer compared to recent bank acquisition prices.
The acquisition price was also approximately 12.1 times First
Interstate's estimated 1995 earnings per share of $11.29 per
share, which is also reasonable in light of other recent bank
acquisitions, although it is lower than 15 times the estimated
next year's earnings paid in other bank acquisitions.
19. Also, prior to Mr. Hazen's call, Siart had stated
that he was determined to keep First Interstate independent.
The mindset of the Director Defendants was further emphasized
by Joseph Pinola, First Interstate's former chairman, who
predicted a protracted struggle and stated, "I don't see
anything that Wells is offering us that is other than
temporary."
20. On or about October 18, 1995, after becoming aware of
Wells Fargo's intent to acquire First Interstate, Siart also
stated that, "We don't see any advantage to talking to anybody
else about a merger."
21. In response to the Wells proposal, Siart also stated
that he was "deeply disappointed" by the proposal, despite the
fact that First Interstate stock had jumped nearly 30% in
response to the proposal. Over the course of the next two and
one-half weeks, First Interstate attempted to give Wells Fargo
the impression that it might be willing to negotiate a takeover
in good faith, while it was in fact pursuing an "anyone but
Wells" strategy.
The Director Defendants Abandon Their "Six-Month
Strategy" To Put First Interstate Up For Sale And Enter
Into An Inferior Sweetheart Deal In l9 Days
22. As part of the "anyone but Wells" strategy, the
Director Defendants provided other potential bidders for First
Interstate with access to First Interstate's books and records
to conduct due diligence to encourage a proposal to compete
with the Wells bid. This conduct by the Director Defendants
served to give other potential bidders an unfair advantage over
Wells Fargo which was denied equal access to First Interstate's
books and records to refine or enhance its bid.
23. During this time period Wells Fargo indicated both
privately to First Interstate and publicly that it had "wiggle
room" in its bid and that it was willing to go higher.
24. Immediately following Wells Fargo's bid, on October
18, 1995, the Director Defendants abandoned their plan and
strategy, expressed by Siart, of taking six months or longer to
consider their options. They knew that Wells Fargo presented a
very credible proposal, as confirmed by a fairness opinion of
their own adviser, at an extremely high premium over First
Interstate's historic market price and that they would have to
either accept the proposal, and risk losing their positions, or
find an alternative transaction, even if it was inferior, to
discourage Wells Fargo from going forward. As a result, the
Director Defendants abandoned their express long-term strategy,
and instead engaged in defensive tactics and a defensive effort
to put the Company up "for sale" to thwart the Wells Fargo
proposal, and to implement their "anyone but Wells" strategy,
regardless of the cost expense and/or waste of corporate assets
that might result from their newly formed defensive strategy.
25. Because of their commitment to implement an "anyone
but Wells" strategy, the Director Defendants either directly or
by conduct and deference to First Interstate's management,
informed the prospective bidders that they would be preferred
over Wells Fargo and given preferential treatment in an effort
to create an alternative transaction that would discourage or
defeat Wells Fargo's bid. It was also determined that the
Director Defendants' and/or First Interstate's management would
also seek preferential treatment in the course of negotiating
any such "alternative" transaction to enable them to keep their
jobs to the greatest extent possible and in any event, with a
greater certainty than they expected should Wells Fargo succeed
with its bid.
26. As a result of this "anyone but Wells" strategy which
was made known to the potential bidders, the Director
Defendants squandered their negotiating leverage by expressing
a willingness to sell First Interstate at a price which would
be extremely favorable to a friendly bidder, and which would in
turn ensure First Interstate's management and directors
preferential treatment in the aftermath of the deal. As part
of this effort the Director Defendants, directly or through
First Interstate's management, also provided one or more of the
prospective bidders with further favorable treatment in the
form of their expression of a willingness to engage in various
defensive maneuvers to favor a prospective alternative bidder
with defensive steps designed to thwart the Wells Fargo
proposal such as, the triggering of a "poison pill", a lock-up
fee, a break-up option, and/or a no-shop provision. These
defensive devices were improperly offered to prospective
bidders in a show of favoritism to ensure the prospective
bidders that they could offer a less favorable deal than Wells,
with the assurance that their deal would be protected in a
manner that would not only render Wells present bid less
favorable but would also make any future bid by wells Fargo or
another suitor more expensive, even if it were to be more
favorable in the absence of these defensive tactics.
27. On November 6, 1995, the defendants collectively
announced the "merger" between First Interstate and First Bank.
As reported by the Associated Press:
Investors seemed unenthusiastic about First
Interstate's decision. The bank's shares fell 87 1/2
cents to $1.26. 87 1/2 on the New York Stock
Exchange. First Bank Systems' shares also sagged,
ending $1 lower at $49.87 1/2.
28. In spite of the stated plan to take six months to
explore its options, the Director Defendants took exactly 19
days to change direction and enter into the executed defensive
merger agreement with First Bank.
29. The First Bank Transaction not only values First
Interstate lower than Wells Fargo's opening offer, but up to
$500 million, or more lower than Wells Fargo's revised offer of
.65 Wells Fargo shares, which was on the table to First
Interstate before the First Bank Transaction was signed. To
compound the damage, defendants included a $100 million "break
up" fee and a $100 million "lock up" option to protect the deal
with First Bank. This makes it up to $200 million more
expensive for another acquirer to purchase First Interstate and
makes First Interstate responsible for paying the funds to
First Bank, even though First Bank does not provide any
corresponding comparable consideration or value and will not
suffer damages in that amount if a higher alternative bid is
available or accepted.
30. An article in the November 8, 1995 Los Angeles Times
illustrates that the First Interstate and First Bank merger
agreement was a fixed, sweetheart deal that confers no benefit
on the Company or the shareholders. The article provides:
And in an apparent attempt to discourage its
hostile suitor, First Interstate warned Wells that
First Bank stands ready to match any competing bid,
according to a person who was present during a
conversation between senior officials of Wells and
First Interstate.
Los Angeles Times, November 8, 1995. These statements
constitute admissions that First Bank not only can, but will,
bid higher for First Interstate if it is not given preferential
treatment and must respond to an auction. First Interstate's
preferential arrangement with First Bank highlights how
completely defendants abdicated their fiduciary
responsibilities and squandered their bargaining power by
failing to conduct an auction to get First Bank to make its
best offer before the merger deal was signed. First Bank and
Grundhofer in turn extracted the defensive provisions from the
Director Defendants to aid their breach of fiduciary and other
duties knowing that it would result in a lower value for the
Company than would be set by market forces and knowing that it
was a breach of the Director Defendants' duties.
31. It is clear from the comments of large First
Interstate shareholders, and analysts, that the First Bank
Transaction is an inadequate excuse for a defensive play
against Wells Fargo. Defendants' only hope to protect the
merger was with the $200 million hurdle imposed by the lock-up
and break up provisions, along with other defensive tactics and
expenditures of corporate resources, which are a waste of
corporate assets.
32. The Director Defendants have taken an inferior bid
and they are committing corporate resources to implementing the
First Bank Transaction, even though major shareholders are
seriously questioning and opposing the deal,
"The number might be closer to $200 to $300
million" [referring to the $500 million assumption
used to value the First Bank transaction] in cost
cuts by First Bank, said Orphanos of Warburg, Pincas
which owned 412,400 First Interstate shares at mid-
year. "That being the case . . . I think Wells is
the best."
Other investors agreed.
"The Wells-Interstate combination makes more
sense," said Robert Poll, director of equity
investments at Oppenheimer Management Corp., which
owns 360,000 First Interstate shares and 525,000
First Bank shares.
"I still think Wells can top it," said James
Schmidt of John Hancock Funds, which owns 269,000
First Interstate shares.
Bloomberg Wire Service, dated November 7, 1995.
33. As stated in a Wall Street Journal article, dated
November 7, 1995, which quoted First Interstate's second
largest shareholder, which is located here in California:
"The best combination is clearly Wells and First
Interstate," said an executive at one of First
Interstate's largest shareholders, Capital Group,
Inc., based in Los Angeles.
34. As reported in a Los Angeles Times article, dated
November 7, 1995:
"First Interstate is going to get sold -- that's
the one thing we learned today," said Scott Edgar of
the Sife Trust Fund, a mutual fund that holds about
110,000 First Interstate shares. "We still don't
know who's going to be the buyer."
* * *
Several money managers whose institutions own
large First Interstate stocks said Monday that they
were holding on to their stock in hopes of a higher
bid.
35. The above reactions were the result of the
announcement of the First Bank Transaction which, at the time,
valued the holdings of First Interstate's public investors at
$132.275 -- approximately $7.21 per share or $550 million lower
than the implied market valuation of the available proposal by
Wells Fargo.
36. Siart, on behalf of the defendants collectively,
stated several rationales for the First Bank Transaction, which
one analyst summed up as follows:
"The stated rationale (by First Interstate) should
cause shareholders to be upset," said Thomas Brown,
an analyst with Donaldson, Lufkin & Jenrette. He
said the deal boils down to "a senior management job
preservation act" for First Interstate executives.
37. In the course of interviews given after the
announcement of the First Bank Transaction, Siart and
Grundhofer admitted that their merger discussions took place
after the Wells Fargo proposal to Siart on October 17. Thus,
it was an unreasonable defensive move, purely in response to
the Wells Fargo proposal, that failed to allow market forces to
set the true price of First Interstate.
38. It was an unreasonable response because it did not
maximize the value of First Interstate's assets given both
First Bank's and Wells Fargo's known willingness to bid higher.
Under these circumstances, the only reasonable response was to
conduct an auction of First Interstate to obtain maximum value
for its assets. It was unreasonable of the Director Defendants
to commit the resources of First Interstate to the "anyone but
Wells" strategy and to provide First Bank with preferential due
diligence, preferential negotiating privileges, the ability to
close the transaction at significantly less than either First
Bank or Wells Fargo were actually willing to bid, up to $200
million in preferential fees and options at the expense of
First Interstate and the additional protection from a competing
bid by wielding First Interstate's poison pill against any
competing offer.
Wells Fargo Makes Yet A Higher Bid And Offers To Go
Head-to-Head With First Bank For "Best And Final"
Offers -- The Director Defendants Reject This Proposal
Worth Hundreds Of Millions Of Dollars More
39. On Monday, November 13, 1995, Wells Fargo announced
that it intended to take its offer to acquire First Interstate
directly to the shareholders by an exchange offer. Under the
offer, Wells Fargo will offer First Interstate shareholders an
opportunity to exchange their shares for .67 shares of Wells
Fargo, an increase over both the initial .625 exchange proposal
on October 17-18 and the later .65 exchange proposal made prior
to the execution of the First Bank Transaction. Based upon the
closing price of Wells Fargo on November 10, 1995 (the last
trading day before the enhanced offer) Wells Fargo valued the
proposal at $143.58 per share of First Interstate common stock,
giving the transaction a total value of $10.9 billion.
40. However, due to the unreasonable defensive measures
and waste and abuse of First Interstate's assets, the Wells
Fargo offer, although superior to the First Bank Transaction,
is conditioned upon, among other things, the redemption or
invalidation of First Interstate's "poison pill."
41. As evidence of Wells Fargo's good faith and the value
of its proposal, it expressly stated that it would not seek any
break up fees or lock-up options.
42. Additionally, as further evidence that First
Interstate is being sold to First Bank at an inadequate price,
Wells Fargo offered to engage in a process whereby:
Wells Fargo and First Bank System would each be given
10 days to submit its best and final merger proposal,
and First Interstate would agree to submit both
proposals promptly to its stockholders in a manner
fair and acceptable to both bidders so that the
stockholders would be able to decide for themselves
which proposal is in their best interests.
43. The above proposal by Wells Fargo is a clear
indications that if it is treated fairly and equally to First
Bank, it is willing to increase its bid yet a third time to its
"best and final merger proposal." Given that the Director
Defendants and/or First Interstate management acting at their
direction, told Wells Fargo executives that First Bank "stands
ready to match any competing bid," the Director Defendants have
an absolute duty to maximize those bids since First Interstate
was clearly "shopped" and put up "for sale" to obtain the First
Bank Transaction.
44. On November 20, 1995, the Director Defendants, in a
clear breach of their duties and in wrongful continuation of
their "anyone but Wells" strategy, formally rejected the Wells
Fargo proposal in an attempt to continue to shelter and favor
their sweetheart deal with First Bank. The Director Defendants
undertook this rejection of the Wells Fargo proposal because
either: (a) they do not want to force First Bank to offer a
higher price for First Interstate; and/or (b) they are afraid
that First Bank would be unable to match a best and final
merger proposal by Wells Fargo and their "anyone but Wells"
strategy would collapse.
45. Defendants' efforts preserve the First Bank
Transaction flies in the face of the values assigned by the
marketplace to the present competing proposals. As of the
close of the New York Stock Exchange on Monday, November 20,
the trading prices of the three companies' stocks reflected an
implied value of $140.92 per share for the Wells Fargo proposal
(still not "best and final") and $135.85 per share for the
First Bank Transaction (still not its "best and final" either
if it is truthfully willing to match any bid by Wells Fargo as
First Interstate representatives stated). Since there are
approximately 75.7 million First Interstate shares outstanding,
the $5.07 spread makes the market's implied value of the Wells
Fargo bid at least $380 million higher than the First Bank
Transaction as of November 20.
46. First Interstate's top officers and the Director
Defendants are resisting and are going to continue to resist
Wells Fargo so that they can, as they have in the past, retain
themselves in their positions of power, prestige and profit.
For instance, members of First Interstate's Board of Directors
own only a minuscule portion of First Interstate's outstanding
common stock. They actually own only 144,000 shares of First
Interstate's 75.7 million shares of outstanding common stock,
or just .001% of the stock. Thus, whatever interest the
defendants have to protect the interests of the Company, as
shareholders in First Interstate based on their minuscule
holdings of the Company's stock, is far outweighed by their
interest in retaining their lucrative positions of power,
prestige and profit as directors and/or officers of the Company
from which they receive lucrative fees, prestige in the
community, large salaries, and other emoluments of office,
which they will lose if First Interstate is acquired.
47. The outright rejections of the Wells Fargo offers is
a breach of defendants' fiduciary duties to First Interstate,
an abuse of control, and provides unjust enrichment to all
defendants.
48. Unless defendants are enjoined from closing the First
Bank Transaction without conducting an auction of First
Interstate, or taking other actions to avoid maximizing
shareholder value, the Company will continue to suffer injury.
The True Inferior Value Of The First Bank Bid Is Being
Masked And Manipulated By First Bank's Repurchases Of
Its Shares To Prop Up Their Price
49. The defendants stated value of the First Bank
Transaction is also illusory in that First Bank and Grundhofer
are taking steps to prop up First Bank's shares through share
repurchases by First Bank as its stock price starts to drop.
The significance of this slick maneuver cannot be understated
and it is known to all defendants, including the Director
Defendants, to be a required step to give the First Bank
Transaction the appearance of value as close to the Wells Fargo
bid as possible -- albeit still lower. Given that the First
Bank Transaction is an exchange of First Bank shares for First
Interstate shares -- and the exchange ratio determines the
value of the deal, Grundhofer stated the significance of
maintaining First Bank's share price succinctly as follows:
"Grundhofer put it simply, if your stock tanks, the deal's
over."
50. To artificially support First Bank's share price and
prevent it from "tanking," First Bank and Grundhofer, with the
knowledge of the Director Defendants, have engaged in a stock
repurchase pattern by buying large blocks of its shares,
sometimes as much as one half the daily trading volume, as the
price declines to artificially support the price and keep its
bid artificially closer to Wells Fargo's bid.
Defendants Engaged In A Course of Conduct Designed To
Thwart Wells Fargo's Bids At Any Price And Favor First
Bank
51. In the course of Wells Fargo's efforts to acquire
First Interstate, it also attempted to obtain access to non-
public information concerning First Interstate that was made
available to other interested bidders, so that Wells Fargo
could submit its highest and best offer for an acquisition for
First Interstate that would provide the highest value.
Throughout the process the Director Defendants consistently
denied Wells Fargo complete access.
52. Wells Fargo was forced to develop its proposals
without complete assistance from First Interstate, the Director
Defendants or First Interstate management in identifying cost
savings beyond those which could be identified from public
information. As a result, Wells Fargo has been foreclosed from
fully evaluating First Interstate to enable it to make the best
possible offer. Identification of cost savings is a
significant factor in the ability of an acquiring company to
value and/or raise its bid. However, neither the Director
Defendants nor First Interstate, which they controlled, worked
with Wells Fargo to identify these costs savings or synergies
which would exist. They also denied Wells Fargo the
opportunity to conduct a due diligence review comparable to
that provided other interested bidders that would enable Wells
Fargo to conduct the analysis itself.
53. The First Bank Transaction and the accompanying
efforts and expense to implement it and "sell" it to First
Interstate's shareholders, the general public, and regulators
is an uncon-scionable misuse and waste of First Interstate's
assets.
54. The First Bank Transaction serves no legitimate
business purpose toward the maximization of shareholder value.
Rather, it unfairly benefits and entrenches First Interstate's
directors and management at the expense of the Company. For
example, the First Bank Transaction is designed to maximize the
ability of the Director Defendants' and First Interstate's
executives to keep their jobs and already lucrative salaries
and benefits. As a result, the proposed First Bank Transaction
results in the waste of, or unfair dealing in the assets of
First Interstate by the Director Defendants.
55. The pursuit of the First Bank Transaction without
conducting an auction of First Interstate is an unconscionable
and grossly inadequate method of best serving the interests of
the Company. The terms of the First Bank Transaction are
structured to favor the interests of, and to entrench, the
Director Defendants and management of First Interstate, to the
immediate and substantial detriment of the Company.
56. By way of this course of conduct and First Bank
Transaction, the Director Defendants have preferred their own
interests over those of First Interstate.
57. By reason of the foregoing acts, practices and course
of conduct, the Director Defendants have breached and continue
to breach their duties as directors and/or officers of the
Company.
58. Each officer or Director Defendant approved of,
permitted, and facilitated the First Bank Transaction, by among
other things, assisting the First Bank Transaction through the
preparation of documents needed to complete the Transaction,
attending and participating in meetings concerning this matter
and voting in favor of this abusive Transaction, the misuse of
First Interstate's resources and waste of its assets, rather
than the conduct of an auction, which is wrongful to the
Company.
THE "INDEPENDENT" OR "SPECIAL" COMMITTEE
59. The Director Defendants, wrongful scheme and the
First Bank Transaction also included the appointing of an
"Independent" or "Special" Committee of First Interstate
directors made up of certain Director Defendants to provide
what was claimed to be an "independent review" of the Wells
Fargo proposals to First Interstate and the First Bank
Transaction. While these Director Defendants approved of the
rejection of the Wells Fargo bids and the special treatment to
other bidders, and the decision to proceed with the First Bank
Transaction, their approval was not that of "independent"
directors acting in the best interests of the Company but
rather was a continuation of defendants, wrongful acts carrying
out the abuse of control, waste and the breach of fiduciary
duties complained of herein.
60. Siart controlled the Board and thus also the
"Independent" Committee members. None of the Director
Defendants appointed to the "Independent" Committee was truly
independent, and all have an interest in seeing that the
wrongful First Bank Transaction is approved by the Board.
THIS TRANSACTION IS PROCEDURALLY
AND SUBSTANTIVELY UNFAIR
61. The First Bank Transaction is grossly
disproportionately beneficial to the self-serving entrenchment
interests of First Interstate's directors and management and
unfair to the Company. Thus, the Director Defendants, in order
to entrench themselves and aggrandize their positions with
First Interstate have used their power, control and domination
of First Interstate to engineer the abusive First Bank
Transaction in breach of the duties they owe First Interstate.
CONCERTED ACTION
62. At all relevant times mentioned herein, each of the
defendants pursued a common course of conduct, acted with,
pursued a scheme and aided and abetted one another to
accomplish the wrongs complained of herein. The defendants
breached their duties and aided and abetted the breach of
duties by others through their conduct, including, but not
limited to, those acts and omissions outlined herein.
63. The common enterprise and common course of conduct
involved a plan to benefit the defendants, while failing to
protect the interests of First Interstate.
64. Each of the defendants named herein, aided and
abetted and rendered substantial assistance in the
accomplishment of the breach of duty, abuse of control and
waste complained of herein. In taking the action, as
particularized herein, to aid and abet and substantially assist
the commission of this wrongful conduct, each defendant acted
with an awareness of the primary wrongdoing and realized that
his/her conduct would substantially assist the accomplishment
of the abusive and oppressive conduct at issue herein and was
aware of his/her overall contribution to and furtherance of the
common enterprise and common course of conduct. The Director
Defendants each separately and as a group, reached an agreement
with respect to and conspired among themselves to commit the
wrongful acts set forth herein as evidenced by the terms of the
First Bank Transaction, the First Bank share buybacks and the
assurances of roles in the merged company. Defendants'
acts of aiding and abetting include, inter alia, the acts each
of them are alleged to have committed in furtherance of the
common enterprise and common course of conduct complained of
above.
65. As members of the Board of Directors of First
Interstate, the Director Defendants were themselves directly
responsible for authorizing the wrongful conduct. Each of them
had knowledge of and actively participated in and approved of
the wrongdoings alleged, or abdicated his or her
responsibilities with respect to these wrongdoings. All other
defendants assisted the Director Defendants in this wrongful
conduct. The alleged acts of wrongdoing are subjecting First
Interstate to unreasonable lose of value and waste as well as
the continuing risk of reduction of First Interstate's true
value, as described in detail above.
66. Each of the defendants is liable as a direct
participant in, an aider and abettor of, and co-conspirator
with respect to, the wrongs complained of herein. The Director
Defendants each had the power and influence to cause, and did
cause, First Interstate to engage in the conduct complained of
herein.
ABUSE OF CONTROL
67. At all relevant times the Director Defendants owed
First Interstate fiduciary obligations of candor, fidelity,
trust, and loyalty, and are and were required to use their
utmost ability to control First Interstate in a fair, just and
equitable manner, as well as to act in furtherance of the beat
interests of First Interstate and not in furtherance of their
own personal interests.
ADDITIONAL DERIVATIVE ALLEGATIONS
68. Plaintiffs bring this action derivatively pursuant to
Federal Rule of Civil Procedure 23.1 in the right of and for
the benefit of First Interstate to redress injuries suffered
and to be suffered by the Company as a direct result of the
violations of law, breaches of fiduciary duty, corporate
mismanagement, abuse of control as well as the aiding and
abetting thereof, by the defendants. First Interstate is named
as a nominal defendant solely in a derivative capacity. This
is not a collusive action to confer jurisdiction on this Court
which it would not otherwise have.
69. Plaintiffs will adequately and fairly represent the
interests of First Interstate.
70. Plaintiff has not made any demand on the present
Board of Directors of First Interstate to institute this action
since such demand would be a futile and useless act for the
following reasons:
(a) The Director Defendants engaged in the above
wrongful conduct which constituted unreasonable and wasteful
defensive measures in response to Wells Fargo's takeover
proposal not protected by the business judgment rule and they
improperly put First Interstate up "for sale" through
preferential treatment of bidders friendly to management,
without conducting an auction to obtain the Company's true
value.
(b) The First Interstate Board of Directors
participated in and approved the acts, omissions and wrongs
complained of above. The Director Defendants were not
disinterested in those transactions and they were dominated and
controlled by First Interstate's management. In addition,
there is more than a reasonable doubt that they did not
exercise proper business judgment on behalf of First Interstate
in allowing the First Bank Transaction to proceed;
(c) The First Interstate Board of Directors, members
have divided loyalties between their own interests and First
Interstate and as a result of their conflict of interest and
the other circumstances alleged, they did not properly exercise
business judgment on behalf of First Interstate in connection
with the opportunities and transactions alleged;
(d) The acts complained of herein constitute
violations of fiduciary duties owed by the Director Defendants
and these acts are incapable of ratification;
(e) The known principal wrongdoers and beneficiaries
of the wrongdoing complained of herein are in a position to,
and do, dominate and control First Interstate and its Board of
Directors. Thus, the Board could neither exercise independent
objective judgment in deciding whether to bring this action nor
vigorously prosecute this action;
(f) The directors of First Interstate cannot be
relied upon to reach a truly independent decision as to whether
to commence the demanded action against themselves for the
misconduct alleged in this Complaint, in that, inter alia, the
Board of Directors is totally dominated by First Interstate's
management and directly involved in the misconduct alleged and
they have caused the actions complained of. This domination of
the Board of Directors by First Interstate's management has
impaired the Board's ability to validly exercise its business
judgment and rendered it incapable of reaching an independent
decision as to whether to accept plaintiff's demand;
(g) In order to bring this action for breaching
their fiduciary duties, the members of the First Interstate
Board of Directors would have been required to sue themselves
and their fellow directors who are allies in the top ranks of
the Company, and their good friends, with whom they have
entangling financial alliances, interests and dependencies,
which they would not do. Therefore, the Director Defendants
would not be able to vigorously prosecute any such action;
(h) The members of the First Interstate Board of
Directors, who are each defendants herein, receive payments,
benefits, and other emoluments by virtue of their membership on
the Board and association with First Interstate. They are thus
benefitting from the wrongdoing herein alleged and have engaged
in such conduct to preserve their positions of control and the
perquisites thereof, and are incapable of exercising
independent objective judgment in deciding whether to bring
this action. The Board members also have close personal and
business ties with each other and are, consequently, interested
parties and cannot in good faith exercise independent business
judgment to determine whether to bring this action against
themselves and one another;
(i) The Directors would not sue themselves for the
transactions complained of herein, because, inter alia, they
would thereby jeopardize their continued receipt of these
financial benefits;
(j) The composition of First Interstate's Board of
Directors is designed to (and does) make them dependent on and
deferential to the Chairman of the Board of Directors who
controls and dominates the process by which Directors are
selected and approved for nomination or renomination to the
Board and the process by which officers of the Company are
selected;
(k) The entire Board of Directors was and is
involved in the wrongdoing alleged herein, and all Directors
are named as defendants in this action, making it impossible
for any of them to exercise independent judgment in deciding
whether or not to sue themselves and their fellow Directors for
their wrongful conduct; and
(l) The members of the Board of Directors are
beneficiaries of the wrongful transactions complained of
herein.
71. A true copy of this Complaint was delivered to First
Interstate prior to its filing with the Court.
FIRST CAUSE OF ACTION
(Derivative Claim For Intentional
Breach Of Fiduciary Duty)
72. Plaintiff repeats and realleges the preceding
paragraphs as though set forth fully herein. This cause of
action is asserted against all defendants, except nominal
defendant First Interstate.
73. Each of the Director Defendants engaged in and/or
aided and abetted the aforesaid conduct in intentional breach
and/or reckless disregard of the fiduciary duties which he/she
or it owed to First Interstate and First Bank and Grundhofer
aided and abetted the aforesaid conduct.
74. By reason of the foregoing, First Interstate has been
damaged and will continue to sustain significant injuries for
which there is no adequate remedy at law and injuries entitling
an award of damages.
SECOND CAUSE OF ACTION
(Derivative Claim For Breach
Of Fiduciary Duty)
75. Except to the extent they allege intentional or
reckless conduct by any defendant, plaintiff incorporates by
reference and realleges the preceding paragraphs as if set
forth fully herein. This cause of action is asserted against
all defendants, except nominal defendant First Interstate.
76. The Director Defendants engaged in or aided and
abetted the aforesaid conduct without exercising the reasonable
and ordinary care owed to the Company by directors, officers,
managing agents, and/or controlling persons of a corporation.
Defendants First Bank and Grundhofer aided and abetted the
wrongful conduct.
77. First Interstate has been injured by reason of the
defendants, negligent and/or grossly negligent breaches of
their fiduciary duties. Plaintiff seeks equitable relief
damages and other relief as hereinafter set forth.
THIRD CAUSE OF ACTION
(Derivative Claim For Abuse Of Control)
78. Plaintiff repeats and realleges the preceding
paragraphs as though set forth fully herein. This cause of
action is asserted against all defendants, except nominal
defendant First Interstate.
79. The Director Defendants' conduct constituted an
abuse of their ability to control and influence First
Interstate, or, with the assistance of First Bank and
Grundhofer the aiding and abetting of such conduct, for which
all defendants are legally responsible.
80. By reason of the foregoing, First Interstate has been
damaged and has sustained, and will continue to sustain,
significant injuries for which it has no adequate remedy at law
and injuries entitling an award of damages.
FOURTH CAUSE OF ACTION
(Derivative Claim for Unjust Enrichment)
81. Plaintiff repeats and realleges each and every
allegation contained in the preceding paragraphs. This cause
of action is asserted against all defendants, except nominal
defendant First Interstate.
82. As a result of the tortious conduct described above,
certain Director Defendants and First Bank will be unjustly
enriched at the expense of First Interstate.
WHEREFORE, plaintiff demands judgment as follows:
A. Declaring the proposed First Bank Transaction in whole
or in part to be invalid, null, void, unenforceable, unfair,
unjust, and inequitable to First Interstate;
B. Preliminarily and permanently enjoining defendants
from enforcing defensive measures designed to prevent an
auction, bidding or tender offer for First Interstate and from
further wasting assets or abusing their control or
relationships with First Interstate and/or from taking any
steps to prevent an acquisition of First Interstate at a
premium over the First Bank Transaction;
C. Preliminarily and permanently enjoining the defendants
from proceeding with the First Bank Transaction unless or until
the value of that Transaction can be shown to compare favorably
with the takeover premium available following an open and fair
auction of First Interstate and/or unless or until the
shareholders are given a choice between two or more
transactions;
D. Setting aside the First Bank Transaction and/or any
lockup, break up, no-shop provisions or other abusive or
wasteful, defensive measures as null, void and unenforceable;
E. Awarding money damages against all defendants, jointly
and severally, in favor of First Interstate for all losses and
damages suffered as a result of the acts and transactions
complained of herein, together with pre-judgment interest from
the day of the wrongs to the day of judgment herein, molded in
a fashion to ensure defendants do not participate therein or
benefit thereby;
F. Directing all defendants to account for all damages
caused by them and all profits and special benefits and unjust
enrichment they obtain as a result of their unlawful conduct
and imposing a constructive trust thereon;
G. Awarding plaintiff the costs and disbursements of this
action, including reasonable attorneys', accountants', and
experts' fees; and
H. Granting such other and further equitable, injunctive,
or other relief as this Court may deem just and proper.
JURY DEMAND
Plaintiff demands a trial by jury.
DATED: November 21, 1995
MILBERG WEISS BERSHAD
HYNES & LERACH
WILLIAM S. LERACH
SALLIE A. BLACKMAN
ERIN C. WARD
WILLIAM S. LERACH
600 West Broadway, Suite 1800
San Diego, CA 92101
Telephone: 619/231-1058
MILBERG WEISS BERSHAD
HYNES & LERACH
JEFF S. WESTERMAN
355 South Grand Avenue
Suite 4170
Los Angeles, CA 90071
Telephone: 213/617-9007
WEISS & YOURMAN
JOSEPH H. WEISS
319 Fifth Avenue
New York, NY 10016
Telephone: 212/532-4171
WEISS & YOURMAN
KEVIN J. YOURMAN
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
Telephone: 310/208-2800
PRONGAY & MIKOLAJCZYK
KEVIN M. PRONGAY
EUGENE MIKOLAJCZYK
881 Alma Real Drive
Suite 211
Pacific Palisades, CA 90272
Telephone: 310/573-3600
Attorneys for Plaintiff
VERIFICATION
I, the undersigned, say:
I am one of the attorneys for plaintiff in the above-
entitled action; I have read the foregoing VERIFIED DERIVATIVE
COMPLAINT FOR BREACH OF FIDUCIARY DUTY, ABUSE OF CONTROL,
UNJUST ENRICHMENT, AND EQUITABLE RELIEF AND DAMAGES and know
the contents thereof; and I certify that the same is true of my
own knowledge, except as to those matters which are therein
stated upon my information or belief, and as to those matters I
believe it to be true. I make this declaration because the
named plaintiff is absent from the county where I maintain my
law office.
I declare under penalty of perjury under the laws of the
State of California that the foregoing is true and correct.
Executed this 21st day of November, 1995, at San Diego,
California.
WILLIAM S. LERACH
VERIFICATION
I, the undersigned, say:
I am one of the attorneys for plaintiff in the above-
entitled action; I have read the foregoing VERIFIED DERIVATIVE
COMPLAINT FOR BREACH OF FIDUCIARY DUTY, ABUSE OF CONTROL,
UNJUST ENRICHMENT, AND EQUITABLE RELIEF AND DAMAGES and know
the contents thereof; and I certify that the same is true of my
own knowledge, except as to those matters which are therein
stated upon my information or belief, and as to those matters I
believe it to be true. I make this declaration because the
named plaintiff is absent from the county where I maintain my
law office.
I declare under penalty of perjury under the laws of the
State of California that the foregoing is true and correct.
Executed this 21st day of November, 1995, at San Diego,
California.
WILLIAM S. LERACH