In 2016, shareholder Norman Roberts backed off when Navios Maritime Holdings changed its offer.
His most recent lawsuit against Navios Holdings and chief executive Angeliki Frangou is not the first time Norman Roberts has taken the company to court over its dealings with preferred shareholders.
In October 2016, Roberts filed a suit on behalf of himself and his fellow preferred holders, making similar accusations.
"No rational person would want to remain [a preferred] holder after losing the right to receive dividend payments and to enjoy any other basic protection,” the 2016 complaint read. “The remaining [preferred shares] would become essentially worthless if [Navios Holdings] consummates the exchange offers.”
The offer Roberts sued over in 2016 was practically the same one he sued over last Wednesday. At that time, the two-year-old complaint alleged, Navios Holdings offered the preferred shareholders cash or common stock in exchange for tendering their shares, with tendering tied to a consent solicitation to forgo future dividends. Two-thirds of preferred shares needed to be tendered for the deal to go through, and the company threatened to delist the shares if the threshold was not reached.
Action abandoned
Roughly seven weeks later, the lawsuit was abandoned. In a letter filed by Roberts' attorneys, Navios had extended the deadline for tendering shares twice, removing the consent solicitation the second time.
"The parties agree that, as a result of the company's decision to terminate the consent solicitation, plaintiff's claims in this action are moot," the document read.
Navios attorneys responded with a letter of their own, alleging Roberts' case "overwhelmingly consists of arguments (and mischaracterisations)" in notifying the court the claims were moot.
Roberts then moved to get Navios Holdings to pay his attorneys fees, which was denied.
It remains unknown if a similar outcome would be acceptable to Roberts. Both the 2016 and 2019 lawsuits requested the judge force Navios to scuttle the plan and award damages to shareholders.
"She [Frangou] shouldn't be structuring a deal in the same way," said Roberts' attorney, Mark Lebovitch of Bernstein, Litowitz, Berger & Grossmann. "She's constantly trying to rip off her preferred shareholders and the board is showing their disloyalty by favouring her need to try to get liquidity for herself over doing their jobs."
In a statement to TradeWinds, Navios claimed the 2016 result meant the company was "completely vindicated by the court".
