Mudrick Capital Management Announces Termination of Globalstar's Merger with Thermo Acquisitions; Selendy & Gay PLLC Serves a...

NEW YORK, Aug. 2, 2018 /PRNewswire/ -- Mudrick Capital Management, L.P., the largest independent shareholder in Globalstar, Inc. (NYSE American: GSAT), announced yesterday that Globalstar has just terminated its unfair merger agreement to acquire FiberLight and several other assets owned by the Thermo Companies, which are controlled by Globalstar's Chief Executive Officer and controlling shareholder, Jay Monroe.  As Mudrick Capital, counseled by Selendy & Gay PLLC, explained in a complaint it filed on May 17, 2018 in Delaware's Court of Chancery, this merger would have resulted in Globalstar and its minority shareholders materially overpaying for assets already controlled by Mr. Monroe, while at the same time significantly diluting its minority shareholders' interests in Globalstar.  Moreover, the merger would have been funded by Globalstar stock that Mr. Monroe himself has conceded is vastly undervalued, thereby transferring a massive amount of wealth from Globalstar's public shareholders to Mr. Monroe.  Mudrick Capital's complaint sought corporate books and records, including e-mails, pursuant to Section 220 of Delaware's General Corporation Law, in order to permit Mudrick Capital to meaningfully investigate the serious wrongdoing it has suspected at Globalstar.

On July 3, 2018, this matter was tried in the Delaware Court of Chancery, with Jason Mudrick, the President and Chief Investment Officer of Mudrick Capital, testifying as the sole witness.  Following this trial, the Court of Chancery on July 31, 2018 issued an order granting Mudrick Capital's demand.  In its opinion, the Court of Chancery found that Mr. Mudrick has testified credibly to the wrongdoing he suspected at Globalstar, and ordered Globalstar to produce nearly all corporate books and records sought, including e-mails from each of Globalstar's C.E.O. Jay Monroe, its General Counsel, and the chair of the Special Committee that had approved the unfair merger.  One day after this ruling, Globalstar terminated its merger agreement with the Thermo Companies.

Jason Mudrick, the President and Chief Investment Officer of Mudrick Capital, has released a statement praising the Court's ruling:  "We are gratified by the Court's decision ordering Globalstar to produce the corporate books and records we sought, including e-mails.  These documents are crucial to our ability to investigate the wrongdoing we have suspected at Globalstar, and to take meaningful steps to protect minority shareholders from such actions in the future.  We believe that Globalstar's decision to terminate its planned merger with the Thermo Companies represents a victory for all of Globalstar's independent shareholders.  We remain committed to protecting the rights of Globalstar's minority shareholders and intend to continue investigating the wrongdoing we suspect at Globalstar." 

Jordan Goldstein, a partner at Selendy & Gay PLLC, which serves as lead counsel in this matter, has also released a statement praising Mudrick Capital's decision to initiate this proceeding.  "Mudrick Capital's efforts in seeking books and records to meaningfully investigate suspected wrongdoing at Globalstar has now been validated by the Court of Chancery.  The Court's decision to require the production of e-mails and other documents demonstrates the strength of our allegations as to the unfairness of the proposed merger.  Globalstar's resulting decision to terminate the merger just one day after the Court's ruling confirms that Mudrick Capital's efforts in this proceeding have been instrumental in protecting Globalstar's independent shareholders from this unfair merger." 

 

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SOURCE Selendy & Gay PLLC

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