SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
AMENDMENT NO. 2
TO
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________________
GROW GROUP, INC.
(Name of Subject Company)
GROW GROUP, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.10 PER SHARE
(Title of Class of Securities)
399820 10 9
(CUSIP Number of Class of Securities)
Lloyd Frank, Esq.
Secretary
Grow Group, Inc.
200 Park Avenue
New York, N.Y. 10166
(212) 599-4400
(Name, address and telephone number of person authorized to receive
notice and communication on behalf of the person(s) filing statement).
With a Copy to:
Daniel E. Stoller, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, N.Y. 10022
(212) 735-3000
This Amendment supplements and amends as Amendment No. 2 the
Solicitation/Recommendation Statement on Schedule 14D-9,
originally filed on May 4, 1995 (the "Schedule 14D-9"), by Grow
Group, Inc., a New York corporation (the "Company"), relating to
the tender offer by GDEN Corporation, a New York corporation (the
"Purchaser") and an indirect wholly owned subsidiary of Imperial
Chemical Industries PLC, a corporation organized under the laws
of England ("Parent"), initially disclosed in a Tender Offer
Statement on Schedule 14D-1, dated May 4, 1995, to purchase all
outstanding shares of common stock, par value $0.10 per share
(the "Common Stock" or the "Shares"), of the Company at a price
of $18.10 per Share, net to the seller in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase,
dated May 4, 1995 and the related Letter of Transmittal.
Capitalized terms used and not otherwise defined herein shall
have the meanings set forth in the Schedule 14D-9.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
SHERWIN-WILLIAMS OFFER.
The Company issued a press release announcing that
Sherwin-Williams commenced an unsolicited tender offer to acquire
all outstanding Shares of the Company at a price of $19.50 per
Share. A copy of such press release is filed herewith as Exhibit
15 and is incorporated herein by reference.
CERTAIN LITIGATION.
On May 5, 1995, a purported class action entitled
Martin Appelbaum and Rosalyn Younger v. Grow Group, Inc., et al.
(Index No. 95-111346) was filed in the Supreme Court of the State
of New York, New York County (the "Appelbaum State Action") on
behalf of the Company's shareholders against the Company, all
members of the Company's Board of Directors (the "Individual
Defendants"), and Parent. The complaint alleges that the
Individual Defendants have breached and are breaching their
fiduciary duties to the purported class of the Company's
shareholders by, among other things, failing to respond in a
reasonable and informed manner to Sherwin Williams' expression of
interest in the Company; and to inform themselves as to other
potential acquirors or merger partners so as to maximize
shareholder value.
The complaint in the Appelbaum State Action seeks,
among other things, an order: requiring the defendants to carry
out their fiduciary duties to plaintiffs and other members of the
purported class; enjoining the transaction between the Company
and Parent, and rescinding any transactions effected by the
defendants in an unfair manner and for an unfair price; damages
suffered as a result of the acts and transactions alleged in the
complaint; an accounting for all profits realized as a result of
the complained of transaction; and costs, disbursements, and
reasonable attorneys' and experts fees.
On May 5, 1995, a purported class action entitled
Samuel Pill v. Grow Group, Inc., et al., (Index No. 95-111439)
was filed in the Supreme Court of the State of New York, New York
County (the "Pill State Action") on behalf of the Company's
shareholders, against the Company and all members of the
Company's Board of Directors (the "Individual Defendants"). The
complaint alleges that the Individual Defendants breached their
fiduciary duties to the purported class of the Company's
shareholders by agreeing to the transaction at a price which they
knew was grossly unfair, inadequate and not representative of the
true and present value of the Company. The complaint also
alleges, among other things, that the Individual Defendants have
breached their fiduciary duties to the purported class by failing
to auction the Company to the highest bidder. The complaint
further alleges that the option granted to Parent to purchase
Corimon's 25% interest in the Company is a breach of the
fiduciary duties owed by defendant Broslat, who is a director of
the Company and the Chief Financial Officer of Corimon.
The complaint in the Pill State Action seeks, among
other things, an order declaring that the Individual Defendants
have breached their fiduciary duties; enjoining defendants from
proceeding with the transaction; damages in an unspecified
amount; and costs, disbursements and counsel and expert fees.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No.
Exhibit 15 Press Release, dated May 8, 1995, issued by
the Company.
Exhibit 16 Class Action Complaint entitled Martin
Appelbaum and Rosalyn Younger v. Grow Group,
Inc. et. al., filed in the Supreme Court of
the State of New York, New York County.
Exhibit 17 Class Action Complaint entitled Samuel Pill
v. Grow Group, Inc. et al., filed in the
Supreme Court of the State of New York, New
York County.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: May 8, 1995 GROW GROUP, INC.
By /s/ Lloyd Frank
Title: Secretary
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
15 Press Release, dated May 8, 1995, issued by the
Company.
16 Class Action Complaint entitled Martin Appelbaum
and Rosalyn Younger v. Grow Group, Inc. et. al.,
filed in the Supreme Court of the State of New
York, New York County.
17 Class Action Complaint entitled Samuel Pill v.
Grow Group, Inc. et al., filed in the Supreme
Court of the State of New York, New York County.
Exhibit 15
GROW GROUP RECEIVES UNSOLICITED BID
NEW YORK, NEW YORK, May 8, 1995... Grow Group,
Inc. ("Grow") (NYSE:GRO) announced today that The
Sherwin-Williams Company has commenced an unsolicited
tender offer to acquire, subject to certain conditions,
all outstanding shares of Grow Common Stock at a price of
$19.50 per share. The Sherwin-Williams Offer is
scheduled to expire on June 5, 1995.
Grow said that it will study Sherwin-Williams'
offer and its Board of Directors will consider the
Sherwin-Williams offer and advise Grow shareholders as to
its recommendation.
Last week, Grow announced that it entered into
a definitive merger agreement with Imperial Chemical
Industries, PLC, an English company ("ICI"), pursuant to
which ICI offered to purchase all outstanding shares of
Grow Common Stock for $18.10 per share. ICI's cash
tender offer commenced on Thursday, May 4, 1995 and is
scheduled to expire on Thursday, June 1, 1995.
In connection with the Merger Agreement with
ICI, Corimon, S.A.C.A., which owns approximately 25% of
Grow's shares, entered into a separate Option Agreement
with ICI at a price of $17.50 per share. ICI's purchase
of the shares owned by Corimon is conditioned upon ICI's
prior consummation of its tender offer.
Grow Group is a leading producer of specialty
chemical coatings and paints and household products.
Grow operations include manufacturing facilities, sales
offices and licensees throughout the world.
Exhibit 16
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- - - - - - - - - - - - - - - - - x
MARTIN APPELBAUM and :
ROSALYN YOUNGER,
:
Plaintiffs,
: Index No. 95-111346
-against-
: CLASS ACTION COMPLAINT
GROW GROUP, INC., ARTHUR BROSLAT,
LLOYD FRANK, ANGUS MACDONALD, :
WILLIAM TURNER, HAROLD BITTLE,
JOHN GLEASON, ROBERT MILANO, :
TULLY PLESSER, RUSSELL BANKS,
PHILIPPE ERARD, PETER KEANE, :
JOSEPH QUINN and IMPERIAL
CHEMICAL INDUSTRIES P.L.C., :
Defendants. :
- - - - - - - - - - - - - - - - - x
Plaintiffs, by their attorneys, allege upon information
and belief, except as to paragraph 4 which is alleged upon
knowledge, as follows:
1. Plaintiffs bring this action as a class action on
behalf of themselves and all other similarly situated
stockholders of Grow Group, Inc. ("Grow Group" or the "Company")
against defendants for failing to take adequate steps to insure
that Grow Group shareholders receive maximum value for their
shares of Grow Group stock.
2. In particular, defendants have improperly
responded to a bona fide expression of interest by Sherwin-
Williams Company ("Sherwin-Williams") to enter into a business
combination with Grow Group by refusing to communicate with
Sherwin-Williams.
3. The individual defendants are abusing their
fiduciary positions of control over Grow Group to thwart
legitimate attempts to acquire the Company, to prevent Grow
Group's shareholders from knowing of, receiving, and/or acting
upon bona fide offers for the Company. The actions of the
Individual Defendants constitute a breach of their fiduciary
duties to maximize shareholder value, to not consider their own
interests over that of the public shareholders, and to refrain
from interfering with the voting rights of the public
shareholders.
THE PARTIES
4. Plaintiffs are and have been, at all relevant
times, the owner of Grow Group common stock.
5. Defendant Grow Group is a corporation organized
and existing under the laws of the State of New York with offices
at 200 Park Avenue, New York, New York. Grow Group manufactures
and markets trade paints and coatings, chemical automotive and
industrial products, including thinners, adhesives and
plastisols, high gloss urethane coatings and chemical coatings.
The Company had, as of February 1, 1995, approximately 16 million
shares outstanding held by 4 thousand stockholders of record.
6. Defendant Russel Banks ("Banks") is and has been
at all relevant times the Company's President and Chief Executive
Officer.
7. Defendants Arthur Broslat, Lloyd Frank, Angus
MacDonald, William Turner, Harold Bittle, John Gleason, Robert
Milano, Tully Plesser, Philippe Erard, Peter Keane and Joseph
Quinn are and have been at all relevant times directors of Grow
Group.
8. By virtue of their position as directors and/or
officers of Grow Group, the defendants referred to in paragraphs
6 and 7 above (collectively referred to herein as the "Individual
Defendants") were and are in a fiduciary relationship with
plaintiffs and the other public stockholders of the Company, and
owe to plaintiffs and the other members of the Class the highest
obligations of good faith, complete candor and fair dealing.
9. Imperial Chemical Industries, PLC ("Imperial" is
named herein as an aider and abettor of the breach of fiduciary
duties with which the Individual Defendants have been charged.
Imperial is a British corporation which is subject to
jurisdiction in this state as a result of the business activities
conducted in this state.
CLASS ACTION ALLEGATIONS
10. Plaintiffs bring this action for declaratory,
injunctive and other relief on their own behalf and as a class
action pursuant to CPLR SECTION 901 et seq. and on behalf of all
common stockholders of Grow Group (except defendants herein and any
person, firm, trust, corporation or other entity related to or
affiliated with any of the defendants) or their successors in
interest, who are being deprived of the opportunity to maximize
the value of their Grow Group shares by the wrongful acts of the
defendants as described herein.
11. This action is properly maintainable as a class
action for the following reasons:
(a) The class of stockholders for whose benefit
this action is brought is so numerous that joinder of all class
members is impracticable. There are approximately 16 million
common shares of Grow Group outstanding, owned by 4 thousand of
stockholders of record. Members of the Class are scattered
throughout the United States.
(b) There are questions of law and fact which are
common to members of the Class and which predominate over all
questions affecting only individual members, including whether
the defendants have breached or aided and abetted a breach of the
fiduciary duties owed by them to plaintiffs and members of the
Class by reason of the acts described herein.
(c) The claims of plaintiffs are typical of the
claims of the other members of the Class and plaintiffs has no
interests that are adverse or antagonistic to the interests of
the Class.
(d) Plaintiffs are committed to the vigorous
prosecution of this action and have retained competent counsel
experienced in litigation of this nature. Accordingly,
plaintiffs are adequate representatives of the Class and will
fairly and adequately protect the interests of the Class.
(e) The prosecution of separate actions by
individual members of the Class would create a risk of
inconsistent or varying adjudications with respect to individual
members of the Class and establish incompatible standards of
conduct for the party opposing the Class.
(f) Defendants have acted and are about to act on
grounds generally applicable to the Class, thereby making
appropriate final injunctive or corresponding declaratory relief
with respect to the Class as a whole.
FACTUAL BACKGROUND
12. On May 1, 1995, it was announced that defendant
Grow Group had entered into an agreement to be acquired by
Imperial. Under the terms of the acquisition, plaintiffs and
other Class members will receive $18.10 per share for an
aggregate value of approximately $290 million.
13. The merger agreement calls for Imperial to make a
cash tender offer promptly for all outstanding common shares of
Grow Group at $18.10 per share. The tender offer will be
followed as soon as possible by a second-step cash merger in
which each share of Grow Group not acquired in the tender offer
will be converted into the right to receive $18.10 in cash.
14. Corimon S.A.C.A., the Venezuelan firm which owns
about 25% of Grow Group's shares, entered a separate agreement to
sell its Grow Group shares to Imperial for $17.50 a share.
15. Imperial's purchase of the shares owned by Corimon
is conditioned upon Imperial's prior completion of the tender
offer.
16. Grow Group said its board unanimously approved the
merger based on, among other things, an opinion as to the
fairness of the offer and the merger from investment advisor
Wertheim Schroder & Co.
17. Imperial's tender offer is conditioned on, among
other things, the valid tender of at least two-thirds of Grow
Group's shares on a fully diluted basis, including the Corimon
shares. The tender offer is scheduled to start later this week.
18. On May 4, 1995 it was publicly reported, for the
first time, in a filing with the Securities and Exchange
Commission that Grow Group had received an expression of interest
from Sherwin-Williams.
19. According to the filing, the Company received a
letter on April 29 and phone calls on May 1 from Sherwin-
Williams' representatives reiterating its interest.
20. Sherwin-Williams said in the letter that it had
offered to enter into a confidentiality agreement with Grow Group
on March 17 and forwarded a copy of the agreement on March 31 but
that Grow Group never executed the agreement.
21. In the letter, Sherwin-Williams said it was
informed on April 17 that it was to be excluded from any bidding
process.
22. The Individual Defendants have entered into the
merger agreement without properly exposing Grow Group for sale.
By failing to publicly expose Grow Group for sale, the Individual
Defendants remain essentially uniformed of the true value of Grow
Group and/or whether some other potential transaction partner is
willing, or in a better position, to maximize the value of Grow
Group's equity. Indeed, the Individual Defendants have
affirmatively discouraged a bona fide bidder.
23. Despite Sherwin-Williams' evident seriousness of
purpose, defendants have acted without regard to the fiduciary
duty they owe Grow Group's shareholders and have cavalierly
failed to enter into any discussion with Sherwin-William to
inform themselves about Sherwin Williams' intentions. Instead,
defendants entered into the agreement with Imperial.
24. The Individual Defendants have breached their
fiduciary duties of due care to Grow Group stockholders by
failing to take all reasonable steps to maximize shareholder
value and prematurely entering into a merger agreement with
Imperial which will have the effect of chilling the emergence of
expression of interest by other potential suitors.
25. Potential acquirors could present Grow Group with
a broad range of alternatives for Class members which need to be
analyzed by independent directors and advisors who are unfettered
by concerns for the interests the conflicted directors or any
other affiliated shareholders who may have interests which
conflict with other Class members.
26. As members of the Board of Directors, Grow Group
and the Individual Defendants owe to Grow Group stockholders
certain fiduciary duties, including the highest obligations of
due care, good faith, loyalty, candor and to maximize shareholder
value. The Individual Defendants must act independently so that
the interests of the Class are adequately protected, and take
steps to avoid or neutralize any conflicts of interest in
connection with discussions and negotiations concerning a sale of
Grow Group or some other extraordinary transaction involving the
Company.
27. The defendants have breached, are breaching, and
will continue to breach their fiduciary duties by at least the
following:
(a) By failing to respond in a reasonable and
informed manner to Sherwin-Williams' announcements regarding its
interest in a business combination with the Company; and
(b) By failing to inform themselves as to other
potential acquirors or merger partners for the Company so as to
maximize stockholder value.
28. The actions taken by the Individual Defendants are
in breach of those fiduciary duties owed to plaintiffs and the
other members of the Class. Defendants have failed to take steps
to avoid or neutralize any conflicts of interest in connection
with negotiations leading up to a sale or other extraordinary
transaction involving Grow Group.
29. As a result of the foregoing, Grow Group and the
Individual Defendants have breached their fiduciary duties of
good faith, fair dealing, loyalty and candor, and have failed to
maximize shareholder value owed to plaintiffs and the Class.
30. Plaintiffs and the Class have no adequate remedy
at law.
WHEREFORE, plaintiffs demand judgment as follows:
A. Declaring this to be a proper class action;
B. Ordering defendants to carry out their
fiduciary duties to plaintiffs and the other members of
the Class, including those of due care and candor;
C. Rescinding any transactions effected by the
defendants in an unfair manner and for an unfair price
and in the event such transaction is consummated prior
to trial, awarding rescissory damages;
D. Enjoining the complained of transaction or
any related transactions;
E. Ordering defendants, jointly and severally,
to pay to plaintiffs and the Class all damages suffered
and to be suffered by them as a result of the acts and
transactions alleged herein;
F. Ordering defendants, jointly and severally,
to account to plaintiffs and the Class for all profits
realized and to be realized by them as a result of the
transaction complained of and pending such accounting
to hold such profits in a constructive trust for the
benefit of plaintiffs and the other members of the
class;
G. Awarding plaintiffs the costs and
disbursements of the action, including allowance for
plaintiffs' reasonable attorneys' and experts' fees;
and
H. Granting such other and further relief as may
be just and proper in the premises.
Dated: New York, York
May 5, 1995
Yours, etc.,
ABBEY & ELLIS
212 East 39th Street
New York, New York 10016
(212) 889-3700
LAW OFFICES OF JAMES V. BASHIAN
500 Fifth Avenue
Suite 2800
New York, New York 10110
(212) 921-4110
Attorneys for Plaintiffs
(grow/comp.mm)
Exhibit 17
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- - - - - - - - - - - - - - - - - x
SAMUEL PILL,
: COMPLAINT
Plaintiff,
: CLASS ACTION
-against-
: Index #95-111439
GROW GROUP, INC., HAROLD G.
BITTLE, JOHN F. GLEASON, ROBERT :
J. MILANO, TULLY PLESSER, RUSSELL
BANKS, PHILIPPE ERARD, PETER L. :
KEANE, JOSEPH M. QUINN, ARTHUR W.
BROSLAT, LLOYD FRANK, ANGUS N. :
MacDONALD, and WILLIAM H. TURNER,
:
Defendants.
- - - - - - - - - - - - - - - - - x
Plaintiff, by his attorneys, alleges upon information
and belief, except as to paragraph 2 which plaintiff alleges upon
knowledge:
1. Plaintiff brings this action on behalf of himself
and all other stockholders of defendant Grow Group, Inc. ("Grow
Group" or the "Company" and the "Class", respectively) to enjoin
defendants from continuing their approval of the $18.10 per share
acquisition bid and for damages sustained as a result of
defendants' failure to auction the Company to the highest bidder
and for defendants' failure to bargain in good faith with a
potential other bidder. Plaintiff and the Class are entitled to
the relief prayed for herein because the acts, as alleged herein,
constitute a breach of the fiduciary duties owed to the Grow
Group stockholders by the defendants.
2. Plaintiff Samuel Pill owns 300 shares of Grow
Group and has been a stockholder at all relevant times.
3. Grow Group is a New York corporation, with its
principal offices located at 200 Park Avenue, New York, NY 10166.
Grow Group manufactures chemical coatings and household products.
The Company produces paints, stains, varnishes and related
equipment and decorating accessories. Grow Group's coatings are
sold through over 1,000 retail outlets in the United States. The
Company also makes swimming pool chemicals, household and
industrial cleaning products, polymers for painting and aerosol
products. Grow Group's stock is listed and actively traded on
the New York Stock Exchange.
4. Defendant Russell Banks, is president and CEO of
the Company.
5. Defendant Joseph M. Quinn is Chief Operating
Officer and Executive Vice-President of the Company.
6. Defendant John F. Glenn is an Executive Vice
President of the Company.
7. Defendant Harold G. Bittle is a Director of the
Company.
8. Defendant Robert J. Milano is a Director of the
Company.
9. Defendant Tully Plesser is a Director of the
Company.
10. Defendant Philippe Erard is a Director of the
Company.
11. Defendant Peter L. Keane is a Director of the
Company.
12. Defendant Arthur W. Broslat is a Director of the
Company
13. Lloyd Frank is the Secretary and a Director of the
Company.
14. Angus N. MacDonald is a Director of the Company.
15. William H. Turner is a Director of the Company.
16. The individuals named in paragraphs 4 through 15,
inclusive may be hereinafter referred to as the "Individual
Defendants."
17. By reason of their positions with Grow Group, the
Individual Defendants are in fiduciary relationships with
plaintiff and the Class and accordingly, owe them the highest
obligations of good faith and fair dealing.
CLASS ACTION ALLEGATIONS
18. Plaintiff brings this case on his own behalf and
as a class action, pursuant to Article 9 of the Civil Practice
Law & Rules of New York, on behalf of all stockholders of Grow
Group (except the 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 the deprivation of their equity interest in
Grow Group through the unlawful scheme of the acquisition as
described herein.
19. This action is properly maintainable as a class
action for the following reasons:
(a) The class is so numerous that joinder of all
members is impracticable. While the exact number of class
members is unknown to plaintiff at this time and can only be
ascertained through appropriate discovery, there are more than 16
million shares of Grow Group's common stock outstanding held by
thousands of shareholders. The holders of these shares are
believed to be geographically dispersed throughout the United
States. Grow Group's common stock is listed and actively traded
on the New York Stock Exchange.
(b) There are questions of law and fact which are
common to the class and which predominate over questions
affecting any individual class member. The common questions
include, inter alia, the following:
a. whether defendants have engaged in a plan and
scheme to enrich themselves at the expense of Grow Group's public
stockholders by the merger through fraudulent, deceptive and
coercive means and devices;
b. whether defendants have breached their
fiduciary and common law duties owed by them by agreeing to an
acquisition by Imperial Chemical Industries Plc of Great britain
for $18.10 a share or a total of $290 million;
c. whether defendants have breached their
fiduciary and other common law duties by refusing to enter into a
confidentiality agreement or an acquisition agreement with
Sherwin William;
d. whether defendants have breached their
fiduciary and other common law duties by not auctioning off the
Company to the highest bidder; and
e. whether plaintiff and the other members of
the class as it was were damaged by the acts complained of
herein.
20. 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 is an
adequate representative of the class and will fairly and
adequately protect the interests of the class.
21. The likelihood that individual members of the
class will prosecute separate individual actions is remote due to
the burden and expense of prosecuting litigation of this nature
and magnitude. Plaintiff anticipates that there will not be any
difficulty in the management of this litigation.
22. For the reasons stated herein, a class action is
superior to other available methods for the fair and efficient
adjudication of the controversy and the requirements of Article 9
of the New York Civil Practice Law and Rules are satisfied.
SUBSTANTIVE ALLEGATIONS
23. On May 4, 1995, the Bloomberg Business News
reported that Grow Group agreed to be acquired by Imperial
Chemical Industries Plc of Great Britain ("Imperial") in a
transaction that values the company at $18.10 a share, or a total
of $290 million (the "Acquisition").
24. Grow Group agreed to be acquired by Imperial
despite an April 28, letter from Sherwin Williams Co. ("Sherwin")
imploring Grow Group not to sign an acquisition agreement with
another firm ("Sherwin Letter").
25. After receiving the Sherwin letter, Grow Group
asked Imperial to raise its $18.10 a share offer, but Imperial
declined.
26. Corimon C.A. SACA ("Corimon") a Venezuelan
industrial corporation has a 25% stake in Grow Group. Defendant
Broslat serves as the Chief Financial Officer of Corimon.
27. Corimon granted Imperial an option to buy its 25%
stake, but that option terminates if Imperials merger agreement
with Grow Group's falls through.
28. The consideration of $18.10 per share proposed to
be paid to public stockholders, as defendants are aware, is
grossly unfair, inadequate and not representative of the true and
present value of Grow Group because as set forth above, at least
one bidder, Sherwin, had expressed an interest in the Company.
29. On March 17, 1995 Sherwin offered to enter into a
confidentiality agreement with Grow Group, that would enable
Sherwin, a potential acquirer to inspect Grow Group's financial
records in order to prepare a bid, and on March 31, 1995
forwarded a signed copy of such confidentiality agreement to the
Company.
30. On April 17, 1995 Grow Group told Sherwin that it
would be excluded from bidding for the Company.
31. When asked why Imperial's overtures were rebuffed
Sherwin's President Ivy responded "I don't have any idea."
32. By failing to auction the Company to the highest
bidder, defendants have breached their fiduciary duties to the
plaintiff and the Class.
33. Apparently on rumors of Sherwin's interest in the
Company, the Company's stock climbed to $19 3/8.
34. By the acts, transactions and courses of conduct
alleged herein, the defendants individually and as part of a
common plan or scheme and/or aiding and abetting one another, in
total disregard of their fiduciary duties and in bad faith to
plaintiff and the Class, are pursuing a plan to deprive plaintiff
and the Class of their investments in Grow Group's at a grossly
inadequate price.
35. The option granted to Imperial by Corimon to
purchase Corimon's 25% interest in the Company is also a breach
of the fiduciary duties owed by defendant Broslat.
36. As a result of the foregoing, defendants herein
have engaged in, and knowingly or recklessly and substantially
assisted in and aided and abetted each other in a breach of their
fiduciary and other common law duties to the plaintiff and to the
class.
37. As a result of the actions of the defendants,
plaintiff and the class have been and will be damaged in that
they have not and will not receive their fair value of their
investment in Grow Group.
38. Unless enjoined by this Court, defendants will
continue to breach their fiduciary duties owed to plaintiff and
the class, and will consummate the acquisition to the irreparable
harm of the class.
39. Plaintiff and the class have no adequate remedy at
law.
WHEREFORE, plaintiff prays for judgment and relief as
follows:
(1) Declaring this action to be a proper class action;
(2) Declaring that the Individual Defendants and each
of them have breached their fiduciary duties to Grow Group and
its stockholders;
(3) Preliminarily and permanently enjoining defendants
and their counsel, agents, servants, employees and all persons
acting under, in concert with, or for them, from proceeding with,
consummating or closing the acquisition;
(4) In the event the Acquisition is consummated,
granting plaintiff and the Class appropriate damages;
(5) Granting compensatory damages in an amount to be
determined upon the proof submitted to the Court;
(6) Granting costs and disbursements;
(7) Granting plaintiff's counsel and expert fees; and
(8) Providing for such other and further relief as may
be necessary and appropriate.
Dated: May 5, 1995
WOLF POPPER ROSS WOLF
& JONES, L.L.P.
845 Third Avenue
New York, New York 10022
(212) 759-4600
Attorneys for Plaintiff
