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Business News/ Companies / Apollo Tyres loses court bid for Cooper Tire case dismissal
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Apollo Tyres loses court bid for Cooper Tire case dismissal

Apollo contended that Cooper didn't live up to its part of the bargain and the $35-a-share deal shouldn't go through

Apollo based its dismissal request on Cooper’s contention that it has no control over its Chinese joint venture partner Chengshan Group and cannot get its books and records. Photo: Ramesh Pathania/MintPremium
Apollo based its dismissal request on Cooper’s contention that it has no control over its Chinese joint venture partner Chengshan Group and cannot get its books and records. Photo: Ramesh Pathania/Mint

Delaware: Apollo Tyres Ltd lost a bid for dismissal of Cooper Tire and Rubber Co.’s lawsuit seeking to force a $2.5 billion takeover, paving the way for a trial next month.

Apollo asked a judge in Delaware last week to throw out Cooper’s case, contending the Ohio-based company hasn’t lived up to its part of the bargain and the $35-a-share deal shouldn’t go through.

“There’s a need to develop the facts, and lawyers should prepare for trial if they can’t settle the case," Delaware chancery court Judge Sam Glasscock III said on Tuesday in a telephone hearing.

“Cooper has been unable for a matter of months to access basic financial material about a significant portion of its business," Raymond DiCamillo, an Apollo lawyer, said in an 18 October letter to the judge.

John Hardiman, another of Apollo’s lawyers, told Glasscock on Tuesday that the buyout was to be completed if, and only if, all conditions have been satisfied.

An attorney for Cooper, Stephen Norman, said in a letter to the judge, “This court has already twice rejected the very same legal argument."

Robert Faxon, also a lawyer for Cooper, told Glasscock on Tuesday that problems with the United Steelworkers union in the US and a strike at a Chinese partner’s tire operations were risks that the parties contemplated and now, Apollo has switched to litigation mode to back out.

Buyout suit

Cooper, based in Findlay, Ohio, said on 12 June that it would be bought by Apollo. Cooper sued Apollo to enforce the buyout after the Gurgaon-based company failed to close the deal by a 4 October deadline.

Cooper contends that Apollo agreed to use its reasonable best efforts to complete the transaction or pay a $112.5 million reverse breakup fee to walk away.

Apollo based its dismissal request on Cooper’s contention that it has no control over its Chinese joint venture partner Chengshan Group Co. and cannot get its books and records. The partnership also is refusing to produce any Cooper brand tires, according to testimony.

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Published: 22 Oct 2013, 09:18 AM IST
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