Black Box faces class-action suit from shareholders
A stockholder of Black Box Corp., saying he represents fellow shareholders, has filed a class-action lawsuit against the Cecil Township-based company to halt its sale, according to documents presented Thursday in Washington County Court.
The case is related to the firm’s pending acquisition by Singapore-based AGC Networks Pte. Ltd., a global solutions integrator. Terms of the merger, announced three weeks ago, call for AGC Networks to acquire all outstanding shares of Black Box for $1.08 per share in cash, subject to regulatory approvals.
That transaction, according to a news release by Black Box at that time, is expected to close by the end of the year.
Black Box, a leading global technology solutions provider, is publicly traded as “BBOX” on Nasdaq. It is located in the village of Lawrence.
Michael Wood, the lead plaintiff, is accusing the company of breach of fiduciary duties. The group is seeking a jury trial, financial damages and an injunction that would stop the sale.
Alfred G. Yates Jr., who has his own practice in Mt. Lebanon, and Marc L. Ackerman, of Brodsky & Smith LLC in Bala Cynwyd, are co-counsel. Yates deferred comment to Ackerman; Ackerman did not return a phone call from the Observer-Reporter.
Black Box Corp. and six directors are listed as the defendants: Joel L. Trammell, who also is president and chief executive officer; Richard L. Crouch; Cynthia J. Comparin; Richard C. Elias; Thomas G. Greig; and John S. Heller.
The company has had a financially tumultuous 2018. Black Box appeared to be facing bankruptcy when it said, in a June 29 filing with the Securities and Exchange Commission, that it had about $24 million in cash and $155.7 million in borrowings outstanding, “which raises a substantial doubt about our ability to continue as a concern beyond” December 2018.
Two weeks after the filing, Black Box Corp. appeared to get a major boost when it was awarded a $10 million contract for a 1-million-square-foot data center another company was building in Ohio. Speculation at the time, which has not been confirmed, is that the partner was Facebook.