Saturday, 29 August 2015
Last updated 9 hours ago
Dec 29 2009 | 10:18am ET
A one-time rival bidder for an appliance company has accused Harbinger Capital Partners of using non-public information to derail its acquisition efforts.
Nacco Industries, which sells appliances under the Hamilton Beach brand, sued the New York-based activist hedge fund and Applica Inc., the company it sought to acquire, alleging breach of contract. According to Nacco—which failed in a similar suit in Ohio federal court in 2006—Applica executives passed non-public information to a Harbinger consultant, who now works for the hedge fund.
Among the non-public information alleged passed to David Maura was the fact of a 2006 deal between Nacco and Applica, which the company accuses the hedge fund of using to build up its stake in Applica, which sells appliances under the Black & Decker brand.
Harbinger itself wound up buying Applica and merging it with yet another appliance company, Salton Inc., which sold appliances under the Westinghouse brand.
Maura, Applica and Harbinger all deny any wrongdoing.
In a statement, the hedge fund called the lawsuit “a continuing effort by a disgruntled buyer to salvage something from its failed effort to buy Applica.” Harbinger founder Philip Falcone added, in his own statement, “with 20/20 hindsight, I wouldn’t do one thing differently.”
But while the Delaware Chancery Court found that there were “potentially legitimate” explanations for the communication between Harbinger and Maura, Vice Chancellor J. Travis Laster ruled in favor of Nacco, allowing its lawsuit to move forward.
May 27 2015 | 2:15pm ET
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