NuStar GP Holdings, LLC (NSH) and its board of directors are facing claims that they violated securities law with regard to a proposed merger. Also named as defendants in the lawsuit are NuStar Energy L.P., Riverwalk Logistics, L.P., NuStar GP, LLC, and Marshall Merger Sub LLC – the companies set to potentially acquire NSH.
The case argues that the defendants filed a misleading proxy statement in connection with the proposed transaction that omits material information needed by stockholders before voting on whether they support the merger. The proxy allegedly leaves out some details of the companies’ financial projections and the valuation analyses performed by NSH’s financial advisor.
Further, the suit claims the proxy “fails to disclose the implied value of the merger consideration, as well as the premiums implied by all offers and proposals submitted to acquire [NSH].” In fact, the complaint argues, the statement was notably silent regarding much of the process leading up to the merger and any potential conflicts of interest faced by the board of director defendants. The plaintiff insists that stockholders should be made aware of the individual members of NSH’s “Conflicts Committee,” the date it was formed, why the committee refused another company’s proposal, when the committee became aware of post-merger employment, and why two board members “recused themselves from voting on the Proposed Transaction.”
Without this information, the case concludes, stockholders cannot make a fully informed decision as to whether they support the proposed transaction.