EXHIBIT 99.4
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
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BANCA DEL GOTTARDO, :
:
Plaintiff, :
:
v. : Civil Action No. 19294-NC
:
CYNTHIA R. MAY and BIGMAR, INC., a :
Delaware Corporation, :
:
Defendants. :
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COMPLAINT
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Plaintiff Banca del Gottardo, by and for its complaint, alleges upon
knowledge as to itself and upon information and belief as to all other matters,
as follows:
Nature of the Action
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1. This is an action pursuant to 8 Del. C.ss.225 for declaratory and
injunctive relief.
The Parties
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2. Plaintiff Banca del Gottardo ("BDG" or the "Bank") is a limited
liability corporation existing under the laws of Switzerland with its registered
office in Lugano, Switzerland. BDG has entered into various debt and equity
transactions with Defendant Bigmar, Inc. ("Bigmar" or the "Company"). In 1999,
BDG executed
a loan agreement in favor of Bigmar, pursuant to which Bigmar received four
million Swiss Francs in exchange for convertible debt and the right to nominate
two directors to the Bigmar Board. On or about February 27, 2001, BDG and Bigmar
entered into an agreement pursuant to which BDG paid seven million dollars
($7,000,000) in consideration for 7,000 shares of Bigmar's Series B Convertible
Preferred Shares and a warrant for the purchase of 1,400,000 shares of Bigmar's
common stock.
3. BDG currently is the owner of 2,000,000 shares of Bigmar common
stock and, together with affiliates, has a total financial stake in the Company
that exceeds $10,000,000.
4. Defendant Cynthia R. May ("Defendant May") is the former president
and is a director of Bigmar's board of directors (the "Board").
5. Defendant Bigmar is a corporation organized and existing under the
laws of the State of Delaware, with its principal offices located in Johnstown,
Ohio and several divisions located in Switzerland. Bigmar is in the business of
manufacturing generic pharmaceutical oncology products.
The November 16 Meeting And Issuance of Shares to the Bank
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6. Immediately prior to November 16, 2001, the Board of Bigmar
consisted of nine directors: John G. Tramontana, Bernard Kramer, Massimo
Pedrani, Phillipe J.H. Rohrer, Declan Service, Cynthia R. May, Timothy K.
Carroll, John S. Hodgson and Kevin Ryan. At a meeting of the Board on or about
November 16
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(which meeting was adjourned to and continued on November 18, 2001) (the
"November Meeting"), the Board voted to expand the Board by two members to
eleven directors and appointed Frank DeLape and Chris Efird to fill the newly
created seats and satisfy the contractual right of BDG to designate two board
members. The Board, thus, now consists of eleven directors, including
Tramontana, Kramer, Pedrani, Rohrer, Service, May, Carroll, Hodgson, Ryan,
DeLape and Efird.
7. Immediately prior to November 16, 2001, Defendant May was the
President and Secretary of Bigmar. At the November Meeting, a majority of the
Board of Bigmar voted to remove Defendant May as President and Secretary and
appoint Tramontana and Rohrer as acting President and interim Secretary,
respectively, to fill the vacancies created.
8. At the November Meeting, the Board approved issuance of 2,000,000
shares in Bigmar to BOG in exchange for $1,000,000.
9. On or about November 19, 2001, Bigmar entered into an irrevocable
subscription agreement with BDG pursuant to which BDG agreed to pay $1,000,000
to Bigmar in exchange for 2,000,000 shares of Bigmar common stock (the
"Subscription Agreement"). On November 19, 2001, BDG paid Bigmar for the
2,000,000 shares pursuant to the Subscription Agreement by crediting Bigmar's
account. To date, the Company has withdrawn a total of $285,000 of the funds
credited by BDG for the 2,000,000 shares.
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10. On November 19, 2001, Tramontana, in his capacity as Chief
Executive Officer, instructed the transfer agent to issue the 2,000,000 shares
of Bigmar stock to BDG. Thereafter, Defendant May, in violation of her duties as
a director, intentionally and without justification, directed the transfer agent
not to transfer the stock certificates evidencing these shares.
11. Defendant May's actions, which constituted improper manipulation of
the corporate machinery, were improperly taken for the purpose of interfering
with the rights of the holders of a majority (or other requisite number) of
Bigmar shares to exercise their voting rights.
The Consents
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12. On November 26, 2001, Defendant May and Janet Baldauf, purporting
to held and/or control a majority of the voting stock of Bigmar, executed
written consents in lieu of a meeting of stockholders of Bigmar (the "First
Consents") purporting to remove directors Tramontana, Pedrani, Rohrer, Kramer
and Service from the Board.
13. The First Consents were admittedly ineffective to remove the
directors because they failed to represent the number of affirmative votes
required by the Company's bylaws to take such action and failed to represent the
number of affirmative votes required by Delaware law to take such action.
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14. Among other deficiencies, the First Consents appear to fail
improperly to include, in the number of outstanding shares of Bigmar, shares
issued to the Bank and shares issued to certain directors and appear to include
improperly, as affirmative votes in favor of removal, certain shares that
Defendant May lacked the authority to vote.
15. Recognizing that the First Consents were ineffective, certain
stockholders of Bigmar executed written consents on November 28, 2001,
purporting to remove directors Tramontana, Kramer, Pedrani, Rohrer, Service,
DeLape and Efird from the Bigmar board (the "Second Consents").
16. The Second Consents were ineffective for all the same reasons as
the First Consents.
17. Defendant May and a group of directors, consisting of those
directors who were not purportedly removed by virtue of the First Consents and
the Second Consents, have purported to take action on the Company's behalf which
is harmful to the Company and contrary to the Bank's interests, including
entering into a financing transaction on terms highly unfavorable to the
Company.
18. Defendant May will continue to take actions detrimental to the
Company and prejudicial to the Bank, thereby causing the Company and the Bank
irreparable injury.
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WHEREFORE, the plaintiff requests an order;
(i) declaring the First and Second Consents inva1id;
(ii) declaring that the removal of directors Tramontana, Pedrani,
Rohrer, Kramer, Service, DeLape and Efird as directors of Bigmar by written
consent was ineffective;
(iii) declaring that (a) the two million shares purchased by BDG are
issued and outstanding and must be counted in any election of directors Or
submission of consent, or in the alternative (b) requiring such shares to be
issued forthwith and invalidating any consents submitted after November 19,
2001;
(iv) enjoining Bigmar and Defendant May from taking any actions
contrary to, inconsistent with, or which fail to recognize Tramontana, Kramer,
Pedrani, Rohrer, Service, May, Carroll, Hodgson, Ryan, DeLape and Efird as
directors and officers of Bigmar;
(v) declaring Defendant May's actions constitute improper interference
with the Bank's contract rights;
(vi) granting the plaintiff the costs of this action, including
reasonable attorneys' fees; and
(vii) awarding such other and further relief as the Court may deem just
and proper.
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/s/ Edward P. Welch
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Edward P. Welch
Julie A. Tostrup
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Plaintiff
Banca del Gottardo
OF COUNSEL:
Jonathan J. Lerner
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
4 Times Square
New York, New York 10036-6522
(212) 735-3000
DATED: December 4, 2001
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