The suit was filed in Delaware Chancery Court against the company’s directors and claims that the directors sold HARMAN for too little money when they agreed on the $8 Billion price tag. The suit specifically claims “breach of fiduciary duty” by Harman Chairman, President and CEO Dinesh Paliwal, saying that Paliwal and the other directors weren’t acting in the best interest of the company or its shareholders in the deal with Samsung. The filing also calls the deal “flawed and undervalued” and they object to the self-imposed $240 Million termination fee, if Harman were to pursue other bids besides Samsung’s.
This filing comes on the heels of the public complaint in December by Atlantic Investment Management who owns almost 3 percent of Harman’s stock. Leading the lawsuit in the filing is a shareholder named Robert Fine.
There is a shareholder’s meeting sometime in the first quarter of this year to decide the matter, but this could cause some major backlash against the merger. Already, many in the AV market have expressed concern that Samsung could be buying Harman exclusively for the auto products division and may not pay attention to the amazing ProAV brands that Harman holds — brands like Crown, AMX, JBL, dbx, Soundcraft and Lexicon.