XO Communications 2010 Annual Report Download - page 81

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XO Holdings, Inc.
Notes to Consolidated Financial Statements
16. COMMITMENTS AND CONTINGENCIES − (continued)
them to again amend their complaint to include the 2010 Rights Offering and Reverse Stock Split. On
January 5, 2011, defendants filed an opposition to the class certification. Then, on January 28, 2011, plaintiffs
filed another request to amend their complaint, this time requesting that the court enjoin the defendants from
proceeding with ACF Holding’s 2011 Proposal. The case is under consideration and the effect of this case on
the Company, if any, is not known at this time.
Henzel Class Action Complaint
On or about January 26, 2011, Henzel, on behalf of herself and others similarly situated, filed a class
action complaint in the Court of Chancery of the State of Delaware against XO Holdings, Inc., the Chairman,
Carl Grivner, Vincent Intrieri, Harold First, Daniel Ninivaggi, Fredrik Gradin, Robert Knauss, and
David Schechter alleging that XOH and its Board of Directors breached their fiduciary duties of loyalty, good
faith, candor, and due care. The plaintiffs allege that the defendants failed to adequately consider ACF
Holding’s 2011 Proposal. The plaintiffs seek to enjoin this transaction. The case is under consideration and the
effect of this case on the Company, if any, is not known at this time.
Murphy Class Action Complaint
On or about January 28, 2011, Murphy filed a shareholder class action complaint in the Supreme Court
of the State of New York, County of New York against XO Holdings, Inc., the Chairman, Carl Grivner,
Vincent Intrieri, Harold First, Daniel Ninivaggi, Fredrik Gradin, Robert Knauss, David Schechter, and ACF
Holding, alleging that the individually named defendants breached their fiduciary duties by failing to engage
in an honest and fair sale process and failure to disclose material information to the class concerning ACF
Holding’s 2011 Proposal; and that the Chairman, XOH, and ACF Holding aided and abetted the Board’s
breach of fiduciary duties. The plaintiff asks the court to direct defendants to carry out their fiduciary duties;
to declare that the defendants committed a gross abuse of trust; and to enjoin the consummation of the
proposed transaction. The case is under consideration and the effect of this case on the Company, if any, is not
known at this time.
Fast Class Action Complaint
On February 11, 2011, Fast filed a class action complaint in the Delaware Court of Chancery against XO
Holdings, Inc., ACF Holding, the Chairman, Carl Grivner, Vincent Intrieri, Harold First, Daniel Ninivaggi,
Fredrik Gradin, Robert Knauss, and David Schechter alleging that the individually named defendants breached
their fiduciary duties of loyalty and care by abandoning the 2010 Rights Offering and Reverse Stock Split in
favor of ACF Holding’s 2011 Proposal. The complaint also challenges the independence of the Special
Committee and the application of the provision contained in the July 2008 Stock Purchase Agreement entered
into by XOH and certain affiliates of the Chairman in connection with the issuance and sale of Series A and B
Preferred Stock to affiliates of the Chairman and which places certain restrictions on the Chairman’s ability to
effect a transaction that would result in the Chairman obtaining a 90% ownership share in XOH unless such
transaction were approved by a special committee of disinterested directors (the ‘‘Standstill Provision’’).
Plaintiff also asks the Court to enjoin the consummation of ACF Holding’s 2011 Proposal until the
transaction’s ‘‘financial and procedural unfairness’’ is rectified; asks the Court to declare that Special
Committee process in the Standstill Provision does not satisfy the entire fairness requirement; and asks the
court to declare that the Special Committee is incapable of reviewing ACF Holding’s 2011 Proposal. The case
is under consideration and the effect of this case on the Company, if any, is not known at this time.
Borden Class Action Complaint
On February 25, 2011, Borden filed a class action complaint in the Court of Chancery of the State of
Delaware against XO Holdings, Inc., the Chairman, Carl Grivner, Robert Knauss, Harold First, Fredrik
Gradin, Vincent Intrieri, David Schechter, Daniel Ninivaggi, and ACF Holding on behalf of the public
stockholders of XOH. The complaint alleges various breaches of fiduciary duties by defendants related to ACF
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