TORONTO, July 17 /CNW/ - CoolBrands International Inc. (TSX: COB)
("CoolBrands" or the "Company") announces that the Hon. Bernard J. Fried of
the Supreme Court of the State of New York, New York County, issued a Decision
on CoolBrands' November 6, 2008 motion seeking dismissal of the Third Amended
Complaint ("Complaint") filed against the Company and its affiliates by
Capricorn Investors III L.P. ("Capricorn") in connection with the Americana
Limited Partnership ("Partnership") and the Americana Partnership Agreement.
Judge Fried dismissed the Complaint in its entirety.
Capricorn had sought through the Complaint to hold CoolBrands and its
subsidiary, Integrated Brands, Inc. ("Integrated"), liable for alleged
breaches of the Americana Partnership Agreement by an Integrated subsidiary
relating to: Capricorn's demand for a payout under a "change of control"
provision" and the internal disclosure of financial information. However,
neither CoolBrands, nor Integrated, were parties to the Americana Partnership
Agreement. Capricorn argued it should be permitted to "pierce the corporate
veil," which protects a parent company from liability for the acts of a
subsidiary entity, and sue CoolBrands and Integrated. Judge Fried rejected
Capricorn's argument, finding Capricorn failed to plead facts establishing
that either CoolBrands or Integrated had misused control over the Integrated
subsidiary to cause any harm to Capricorn under the Americana Partnership
Agreement.
In granting the portion of CoolBrand's motion concerning the Partnership
Agreement's change of control provision, Judge Fried held that Capricorn
failed to establish that a trigger for liability, namely a "change of control"
at CoolBrands, had occurred when Integrated and its subsidiaries sold various
assets in 2006.
This decision follows Judge Fried's June 13, 2008 dismissal of an earlier
complaint filed by Capricorn. On May 21, 2009, Capricorn perfected an appeal
of only few aspects of this earlier dismissal to the New York State Appellate
Division. CoolBrands is scheduled to file its opposition on August 12, 2009
and oral argument will occur in Appellate Division's September Term.
Commenting on the court's decision, Mr. Michael Serruya, President and
Chief Executive Officer of CoolBrands, stated "We could not be more pleased
that Judge Fried has issued this final decision dismissing all of Capricorn's
remaining claims. While Capricorn has the right to appeal this decision as
they did Judge Fried's earlier ruling, we are confident that Judge Fried's
reasoning was strong and will stand up on review."
CoolBrands and Integrated were represented by Michael Campion Miller and
Evan Glassman of Steptoe & Johnson LLP in New York.
Forward Looking Statements
The information in this document contains certain forward-looking
statements with respect to CoolBrands International Inc., its subsidiaries and
affiliates. These statements are often, but not always made through the use of
words or phrases such as "expect", "should continue", "continue", "believe",
"anticipate", "estimate", "contemplate", "target", "plan", "budget", "may",
"will", "schedule" and "intend" or similar formulations. By their nature,
these forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by management, are
inherently subject to significant, known and unknown, business, economic,
competitive and other risks, uncertainties and other factors affecting
CoolBrands specifically or its industry generally that could cause actual
performance, achievements and financial results to differ materially from
those contemplated by the forward-looking statements. In view of these
uncertainties we caution readers not to place undue reliance on these
forward-looking statements. CoolBrands disclaims any intention or obligation
to update or revise any statements made herein, whether as a result of new
information, future events or otherwise.
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For further information: Carla Aedo, Telephone: (905) 479-8762
