This class action and shareholder derivative action is based upon a proposed merger agreement between the Company and Braveheart Holdings, LP, (“Braveheart”). The transaction is valued at approximately $416 million, including the assumption of debt. Each holder of the Company’s common stock will receive $11 per share and each holder of the Company’s preferred stock will receive $25 per share, plus all accrued and unpaid dividends, whether declared or not.
Immediately prior to the closing date, Defendant Boykin through entities he controls, gets to purchase from the Company, the Company’s interests in Pink Shell Beach Resort and Spa (“Pink Shell”) and the Banana Bay Resort & Marina – Marathon (“Banana Bay”) for consideration that is substantially lower than the value of those assets. Specifically, Defendant Boykin is purchasing the Company’s interests in these two resorts for a reported $14.6 million.
Currently, Defendant Boykin owns, either directly or beneficially, 10.6% of the outstanding shares of the Company’s common stock. The extraordinary benefit inuring to Defendant Boykin in the proposed transaction will not be shared by the other holders of the Company’s common stock. Additionally, by virtue of the exclusion of these assets from the merger transaction with Braveheart, the Company’s shareholders are not realizing the maximum value of their interest in the Company. Also, the proposed merger agreement will trigger certain other compensation and benefits in favor of Defendant Boykin related to his employment agreement and management contracts held by BMC, a company controlled by Defendant Boykin.