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Playboy Enterprises, Inc. Investors File Lawsuit Against Board and Hugh Hefner

  • If you currently hold shares of Playboy Enterprises, Inc. (NYSE:PLA), you have certain options and you should contact the Shareholders Foundation, Inc.

  • To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.

Lawsuit Overview

Company
Playboy Enterprises, Inc.
Security
NYSE: PLA

Case Name
Playboy Enterprises Deal Case 07/13/2010
Type of Lawsuit
Mergers and Acquisition
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Summary

March 21, 2013 - $5.25 million settlement approved.
July, 13 2010 - Shareholders of Playboy Enterprises filed a lawsuit in Delaware Court on behalf of current investors Playboy Enterprises, Inc. (NYSE:PLA) alleging breaches of fiduciary duty by members of the Playboy Enterprises board of directors for trying to sell Playboy Enterprises, Inc too cheaply to Hugh M. Hefner and Rizvi Traverse.

According to the complaint the plaintiff alleges breaches of fiduciary duty by the Board of Directors of Playboy Enterprises arising out of their attempt to sell Playboy Enterprises, Inc to Hefner and Rizvi Traverse at an unfair price through an unfair process.

On Monday, July 12, 2010, Playboy Enterprises, Inc. (NYSE: PLA, PLAA) announced that its board of directors has received a proposal from Hugh M. Hefner to acquire all of the outstanding shares of Class A and Class B common stock of Playboy Enterprises not currently owned by Hefner for $5.50 per share in cash. Hugh M. Hefner owns 69.5% of Playboy Enterprises’s Class A common stock and 27.7% of Playboy Enterprises's Class B common stock.

But the plaintiff alleges that “The Going Private Plan is the product of a flawed process designed to sell PEI to Hefner and Rizvi Traverse on terms detrimental” to stockholders of Playboy.

Shares traded before the news at almost $4 per share and climbed to its 52weekHigh of $5.36 per share after the announcement. PLA shares traded over $8.60 per share in 2008, at almost $12 per share in 2007, and over $15 per share in 2006.