-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V5G5W/TdfDgWhmW/GeursmwwnpD5p+yFiT0HLDwJIgX+7F7XdILGqouEXDZgtApc aN5X8WJk49i4W0RcrxTx+g== 0000950152-03-009699.txt : 20031113 0000950152-03-009699.hdr.sgml : 20031113 20031113171153 ACCESSION NUMBER: 0000950152-03-009699 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20031113 GROUP MEMBERS: J. MICHAEL GORMAN FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TURKEY VULTURE FUND XIII LTD CENTRAL INDEX KEY: 0000935886 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 7001 CENTER STREET CITY: MENTOR STATE: OH ZIP: 44060 BUSINESS PHONE: 2169511111 MAIL ADDRESS: STREET 1: 7001 CENTER ST STREET 2: 7001 CENTER ST CITY: MENTOR STATE: OH ZIP: 44060 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ENERGY WEST INC CENTRAL INDEX KEY: 0000043350 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 810141785 STATE OF INCORPORATION: MT FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-38350 FILM NUMBER: 03999087 BUSINESS ADDRESS: STREET 1: 1 FIRST AVE SOUTH STREET 2: PO BOX 2229 CITY: GREAT FALLS STATE: MT ZIP: 59401 BUSINESS PHONE: 4067917500 MAIL ADDRESS: STREET 1: ENERGY WEST INC STREET 2: 1 FIRST AVE SOUTH PO BOX 2229 CITY: GREAT FALLS STATE: MT ZIP: 59401 FORMER COMPANY: FORMER CONFORMED NAME: GREAT FALLS GAS CO DATE OF NAME CHANGE: 19920703 SC 13D/A 1 l04165asc13dza.txt ENERGY WEST, INC./TURKEY VULTURE FUND XIII-SC13D/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT RULE 13D-2(A) (Amendment No. 6) Energy West, Incorporated - ------------------------------------------------------------------------------ (Name of Issuer) Common Stock - ------------------------------------------------------------------------------ (Title of Class of Securities) 29274A-10-5 - ------------------------------------------------------------------------------ (CUSIP Number) Marc C. Krantz, Kohrman Jackson & Krantz P.L.L., 1375 East 9th Street, 20th Fl., Cleveland, OH 44114, (216) 696-8700 ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 12, 2003 - ------------------------------------------------------------------------------ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box: [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 5 SCHEDULE 13D CUSIP NO. 29274A-10-5 PAGE 2 OF 5 ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Turkey Vulture Fund XIII, Ltd. ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ X ] ----- (B) [ ] ----- ----------------------------------------------------------------------------- 3 SEC USE ONLY ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS ----------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [__] ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America ------------------------------------ ---------- ----------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 166,358 ------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER OWNED BY ------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING 166,358 ------------------------------------ PERSON 10 SHARED DISPOSITIVE POWER WITH ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 166,358 ----------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [__] ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.41% ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO ----------------------------------------------------------------------------- SCHEDULE 13D CUSIP NO. 29274A-10-5 Page 3 of 5 ----------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON J. Michael Gorman ----------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (A) [ X ] ----- (B) [ ] ----- ----------------------------------------------------------------------------- 3 SEC USE ONLY ----------------------------------------------------------------------------- 4 SOURCE OF FUNDS ----------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [__] ----------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America ----------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 92,560 ---------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY ---------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 92,560 ---------------------------------------- PERSON WITH 10 SHARED DISPOSITIVE POWER ----------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 92,560 ----------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [__] ----------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.57% ----------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN ----------------------------------------------------------------------------- This Amendment No. 6 to Schedule 13D is filed on behalf of Turkey Vulture Fund XIII, Ltd., an Ohio limited liability company (the "Fund"), of which Richard M. Osborne is the sole Manager, and J. Michael Gorman, relating to shares of common stock, par value $0.15 per share (the "Shares"), of Energy West, Incorporated, a Montana corporation ("Energy West"). ITEM 4. PURPOSE OF THE TRANSACTION. Item 4 of Schedule 13D is amended and supplemented as follows: At approximately 2:15 p.m. Eastern Standard Time on November 11, 2003, Energy West filed a press release announcing that the 2003 annual meeting of shareholders had been postponed from November 12, 2003 until December 3, 2003. Energy West claimed that its largest shareholder, Ian Davidson, was unable to vote his Shares due to "technical" matters with respect to Mr. Davidson's SEC reporting obligations relating to his ownership of the Shares. On November 12, 2003, the Fund filed a verified complaint for a preliminary and permanent injunction and a motion for a temporary restraining order and memorandum in support in the Montana Eighth Judicial District Court, Cascade County, copies of which are attached as Exhibits 7.2 and 7.3, respectively. Following a hearing in consideration of the Fund's verified complaint and motion for a temporary restraining order, the court issued a Temporary Restraining Order, attached as Exhibit 7.4, providing that (i) Energy West is required to hold its 2003 annual meeting of shareholders on or before November 24, 2003, (ii) only those shareholders eligible to vote as of November 12, 2003 are eligible to vote at the 2003 annual meeting of shareholders and (iii) all parties are enjoined from engaging in any further solicitation of proxies of the shareholders of Energy West with respect to the election of directors at the 2003 annual meeting of shareholders. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 7.1 Joint Filing Agreement, incorporated by reference to Exhibit 7.1 to Schedule 13D Statement, dated June 18, 2003, filed on behalf of the Turkey Vulture Fund XIII, Ltd. and J. Michael Gorman 7.2 Verified Complaint for Preliminary and Permanent Injunction filed by Turkey Vulture Fund XIII, Ltd. in the Montana Eighth Judicial District Court, Cascade County, Cause No. DDV-03-1214 7.3 Motion for Temporary Restraining Order and Memorandum in Support filed by Turkey Vulture Fund XIII, Ltd. in the Montana Eighth Judicial District Court, Cascade County, Cause No. DDV-03-1214 7.4 Temporary Restraining Order of the Montana Eighth Judicial Court, Cascade County dated November 12, 2003 Page 4 of 5 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: November 13, 2003 TURKEY VULTURE FUND XIII, LTD. /s/ Richard M. Osborne ----------------------------------- Richard M. Osborne, Manager /s/ J. Michael Gorman ----------------------------------- J. Michael Gorman Page 5 of 5 EX-7.2 3 l04165aexv7w2.txt EXHIBIT 7.2 Exhibit 7.2 Steven T. Potts THOMPSON, POTTS & DONOVAN, P.C. 600 Central Plaza, Suite 201 P.O. Box 2799 Great Falls, MT 59403-2799 Telephone: (406) 727-0500 Attorneys for Plaintiff MONTANA EIGHTH JUDICIAL DISTRICT COURT, CASCADE COUNTY ------------------------------------------------------------------------------ TURKEY VULTURE FUND XIII, LTD., ) 8500 STATION STREET, SUITE 113 ) MENTOR, OHIO 44060 ) ) PLAINTIFF, ) CAUSE NO. DDV-03-1214 ) ---------------------- VS. ) ) VERIFIED COMPLAINT FOR ENERGY WEST, INCORPORATED, ) PRELIMINARY AND PERMANENT ONE FIRST AVENUE, SOUTH ) INJUNCTION GREAT FALLS MONTANA 59403 ) ) VS. ) ) W.E. ARGO, ) C/O ENERGY WEST INC., ) ONE FIRST AVENUE, SOUTH ) GREAT FALLS MONTANA 59403 ) ) VS. ) ) ANDREW I. DAVIDSON, ) C/O ENERGY WEST INC., ) ONE FIRST AVENUE, SOUTH ) GREAT FALLS MONTANA 59403 ) ) VS. ) ) DAVID A. FLITNER, ) C/O ENERGY WEST INC., ) ONE FIRST AVENUE, SOUTH ) GREAT FALLS MONTANA 59403 ) ) VS. ) ) G. MONTGOMERY MITCHELL, ) C/O ENERGY WEST INC., ) ONE FIRST AVENUE, SOUTH ) GREAT FALLS MONTANA 59403 ) ) VS. ) ) TERRY M. PALMER, ) C/O ENERGY WEST INC., ) ONE FIRST AVENUE, SOUTH ) GREAT FALLS MONTANA 59403 ) ) VS. ) ) GEORGE D. RUFF, ) C/O ENERGY WEST INC., ) ONE FIRST AVENUE, SOUTH ) GREAT FALLS MONTANA 59403 ) ) VS. ) ) RICHARD J. SCHULTE, ) C/O ENERGY WEST INC., ) ONE FIRST AVENUE, SOUTH ) GREAT FALLS MONTANA 59403 ) ) DEFENDANTS. - ----------------------------------------------------------------------------- For its Complaint against Defendants, Plaintiff alleges as follows: 1. The Turkey Vulture Fund XIII, Ltd. (the "Fund" or "Plaintiff") is a limited liability company organized under the laws of the State of Ohio. The Fund's principal place of business is 8500 Station Street, Suite 113, Mentor, Ohio 44060. The Fund acquires, holds, sells or otherwise invests in a variety of securities and other investments. 2 2. Energy West, Incorporated ("Energy West") is incorporated under the laws of the State of Montana. Energy West's principal place of business is 1 First Avenue South, Great Falls, Montana 59403. 3. W.E. Argo, Andrew I. Davidson, David A. Flitner, G. Montgomery Mitchell, Terry M. Palmer, George D. Ruff, and Richard J. Schulte are Members of Energy West's Board of Directors. 4. As of November 11, 2003, the Fund beneficially owns 166,358 shares, or 6.41%, of the outstanding shares of common stock, par value $0.15 per share, of Energy West having a current market value of $1,006,466. 5. Pursuant to Section 2.2 of the By-Laws of Energy West, an annual meeting of shareholders must be held in November of each year or such other time as determined by a resolution of the board of directors for the purpose of electing directors. 6. Pursuant to Section 2.7(a) of the By-Laws of Energy West, each shareholder is entitled to cumulate his or her shares for the election of directors and give one candidate as many votes as the number of directors to be elected, multiplied by the number of his or her shares of stock, or distribute the cumulative votes among any number of the candidates. For example, if a shareholder owns five (5) shares of stock and is entitled to vote at a meeting in which three (3) directors will be elected, such shareholder is entitled to vote and distribute fifteen (15) votes, at his or her discretion, among the three director candidates. 7. On July 30, 2003, the Fund, due to its continued dissatisfaction with the management of Energy West, notified Energy West of its intent to nominate five (5) director candidates for election at the 2003 annual meeting of shareholders. 3 8. Energy West notified the Fund by letter dated August 12, 2003, that the Fund's director candidates would not be included in Energy West's proxy materials for the 2003 annual meeting of shareholders. 9. Because the Fund was denied the opportunity to exercise its right to nominate director candidates for inclusion in Energy West's proxy materials, the Fund was left with no other alternative but to engage in an expensive proxy solicitation in order to elect its director candidates at the 2003 annual meeting of shareholders. 10. Energy West filed proxy materials with the Securities and Exchange Commission (the "SEC") on October 9, 2003, setting the 2003 annual meeting for October 31, 2003. 11. The Fund, with other interested shareholders, formed the Committee to Re-Energize Energy West (the "Committee") in order to oppose the incumbent board of directors of Energy West and to nominate a slate of directors for election at the 2003 annual meeting of shareholders. On October 15, 2003, Energy West filed additional proxy materials with the SEC and postponed the annual meeting of shareholders until November 12, 2003. The Committee filed definitive proxy materials with the SEC on October 16, 2003, seeking to elect three director candidates at the 2003 annual meeting of shareholders. 12. Both the Committee and Energy West have, at substantial expense, retained proxy soliciting firms to assist in the solicitation of proxies from shareholders. Due to the nature of cumulative voting in the election of directors, the proxy soliciting firms are able to provide the parties with the anticipated outcome of the election prior to the commencement of the annual meeting. 13. On November 9, 2003, Plaintiff's manager and other representatives traveled to Great Falls to prepare for and attend the previously scheduled meeting of shareholders on 4 November 12, 2003. Plaintiff incurred significant expenses in traveling and other related expenses in order to attend said meeting. 14. On November 11, 2003, at approximately 2:15 p.m. Eastern Standard Time, Energy West filed a press release announcing that the 2003 annual meeting of shareholders had been rescheduled for December 3, 2003. Energy West claimed that its largest stockholder, Ian Davidson, would be unable to vote all his shares of Energy West stock due to "technical" matters with respect to Mr. Davidson's reporting obligations relating to his ownership of the stock. 15. In an attempt to entrench the current board of directors, Energy West postponed the annual meeting of shareholders less than twenty-four (24) hours prior to its commencement upon the realization that the outcome of the election would result in the removal of at least two of its incumbent directors and the election of directors supported by the Fund. CLAIM FOR RELIEF (Breach of Fiduciary Duty) 16. Plaintiff repeats and realleges the allegations of paragraphs 1 through 15 above, as though fully set forth herein. 17. All shareholders are owed fiduciary duties of good faith and loyalty. As Energy West shareholders, the Defendants have a fiduciary duty to act in the best interest of the Plaintiff. The Defendants breached their fiduciary duty by engaging in a course of conduct to manipulate the timing of the annual board of director's election to the detriment of the Plaintiff's interests in Energy West. 18. The Defendants denied Plaintiff's nomination of a slate of director candidates for inclusion in the company's proxy materials in an attempt to avoid any challenge to the incumbent board of directors which was firmly entrenched as a willing partisan to the Plaintiff's interests. 5 19. The Defendants knew that once it denied the Plaintiff its right to nominate a slate of director candidates, the Plaintiff's only recourse would be to engage in a proxy solicitation contest. 20. On the eve of the annual director election, scheduled for November 12, 2003, Defendants learned from its proxy solicitation firm that the Plaintiff had gained sufficient proxy votes to elect at least two of its candidates to the Board. In an effort to avoid the defeat of its incumbent directors, the Defendants announced on the evening prior to the scheduled elections that the election would be postponed until December 3, 2003. 21. The Defendants have engaged in conduct intentionally undertaken to prevent the Plaintiff from having a voice on the board of directors, clearly breaching any and all of their fiduciary duties owed to the Plaintiff. 22. Based on the foregoing, the Defendants' actions have resulted in irreparable harm to Plaintiff. 23. Pecuniary compensation will not afford the Plaintiff adequate relief and it will be extremely difficult, if not impossible, to ascertain the amount of compensation which would afford adequate relief, if the decisions and actions of the Defendants are permitted to continue. 24. Consequently, Plaintiff is entitled to a temporary restraining order and to a preliminary and permanent injunction pursuant to M.C.A. Title 27, Chapter 19, prohibiting the Defendants from manipulating the board of directors electoral process for their own illegitimate gains and interests. WHEREFORE, Plaintiff demands judgment against Defendants as follows: 1. For a temporary restraining order and preliminary and permanent injunctions preventing the Defendants from postponing the annual shareholder meeting from November 12, 6 2003, until December 3, 2003, and requiring the Defendants to conduct an election of the board of directors upon the issuance of this Order; 2. For a temporary restraining order and preliminary and permanent injunctions prohibiting the parties hereto from filing, mailing or otherwise publicly disseminating any additional solicitations for proxies from Energy West shareholders; 3. For a temporary restraining order and preliminary and permanent injunctions prohibiting the Defendants from counting the shares of Ian Davidson in the annual election of directors which were the subject of the November 11, 2003, press release announcing the postponement of the board of directors election until December 3, 2003; 4. For attorney's fees, costs, and expenses of bringing this action as allowed by law; and 5. For such other relief as is just and equitable under the circumstances. Dated this 12th day of November, 2003. THOMPSON, POTTS & DONOVAN, P.C. By: /s/ Steven T. Potts ------------------------------------- Steven T. Potts 600 Central Plaza, Suite 201 P.O. Box 2799 Great Falls, MT 59403-2799 Attorneys for Plaintiff 7 VERIFICATION STATE OF MONTANA ) ) SS: COUNTY OF CASCADE ) RICHARD M. OSBORNE, being first duly sworn, on oath deposes and says: That he is the sole Manager of the Plaintiff company named in the above-entitled cause; that he makes this affidavit for and on behalf of said Plaintiff; that he has read the foregoing complaint and knows the contents thereof, and that the matters and things therein contained are true to the best of his knowledge, information, and belief. /s/ Richard M. Osborne ------------------------------------ RICHARD M. OSBORNE SWORN TO BEFORE ME AND SUBSCRIBED in my presence this 12th day of November, 2003. /s/ Steven T. Potts -------------------------------------- NOTARY PUBLIC for the State of Montana (NOTARIAL SEAL) Residing at Great Falls, Montana My Commission expires: August 24, 2007 ------------------- 8 EX-7.3 4 l04165aexv7w3.txt EXHIBIT 7.3 Exhibit 7.3 Steven T. Potts THOMPSON, POTTS & DONOVAN, P.C. 600 Central Plaza, Suite 201 P.O. Box 2799 Great Falls, MT 59403-2799 Telephone: (406) 727-0500 Attorneys for Plaintiff MONTANA EIGHTH JUDICIAL DISTRICT COURT, CASCADE COUNTY ------------------------------------------------------------------------------ TURKEY VULTURE FUND XIII, LTD., ) ) PLAINTIFF, ) CASE NO. DDV-03-1214 ) --------------------- VS. ) ) MOTION FOR TEMPORARY ) -------------------- ENERGY WEST, INCORPORATED, ) RESTRAINING ORDER AND ) --------------------- ET. AL., ) MEMORANDUM IN SUPPORT ) --------------------- ) DEFENDANTS. ) - ----------------------------------------------------------------------------- Plaintiff, Turkey Vulture Fund XIII, Ltd. ("Plaintiff" or "Fund") respectfully moves this Court for entry of a temporary restraining order to enjoin defendants, Energy West Incorporated ("Energy West"), W.E. Argo ("Argo"), Andrew I. Davidson ("Davidson"), David A. Flitner ("Flitner"), G. Montgomery Mitchell ("Mitchell"), Terry M. Palmer ("Palmer"), George D. Ruff ("Ruff"), Richard J. Schulte ("Schulte") (collectively the "Defendants") from postponing Energy West's annual shareholders' meeting. The Verified Complaint and the following Memorandum in Support establishes that the Fund will suffer irreparable harm if the 2003 annual meeting is postponed. The Fund has expended considerable sums of money on this proxy contest. If the meeting is postponed, the proxies solicited by the Fund will fail to carry out the will of the shareholders existing prior to 1 the annual meeting scheduled for November 12, 2003. As a result, without the granting of a temporary restraining order by this Court, Defendants' actions will cause the Fund to suffer irreparable harm. Respectfully submitted, /s/ Steven T. Potts Steven T. Potts THOMPSON, POTTS & DONOVAN, P.C. 600 Central Plaza, Suite 201 Great Falls, Mt 59403-2799 2 MEMORANDUM IN SUPPORT OF PLAINTIFF'S MOTION FOR A TEMPORARY RESTRAINING ORDER A. STATEMENT OF FACTS The Turkey Vulture Fund XIII, Ltd. (the "Fund") is a limited liability company organized under the laws of the State of Ohio. The Fund's principal place of business is 8500 Station Street, Suite 113, Mentor, Ohio 44060. The Fund acquires, holds, sells or otherwise invests in a variety of securities and other investments. As of November 11, 2003, the Fund beneficially owns 166,358 shares, or 6.41%, of the outstanding shares of common stock, par value $0.15 per share, of Energy West having a current market value of $1,006,466. Energy West is incorporated under the laws of the State of Montana. Energy West's principal place of business is 1 First Avenue South, Great Falls, Montana 59403. Pursuant to Section 2.2 of the By-Laws of Energy West, an annual meeting of shareholders must be held in November of each year or such other time as determined by a resolution of the board of directors for the purpose of electing directors. At the annual meeting, each shareholder is entitled to cumulate his or her shares for the election of directors and give one candidate as many votes as the number of directors to be elected, multiplied by the number of his or her shares of stock, or distribute the cumulative votes among any number of the candidates. For example, if a shareholder owns 5 shares of stock and is entitled to vote at a meeting in which 3 directors will be elected, such shareholder is entitled to vote and distribute 15 votes, in his discretion, among the three director candidates. During the past year, Energy West has announced a series of adverse disclosures, including the following: 1. That it breached a major electricity supply contract with PPL Montana; 2. That it agreed to pay a settlement to PPL Montana to settle PPL's lawsuit against Energy West; 3. That it incurred attorney's fees and expenses arising from the PPL lawsuit; 4. That its net income has been severely reduced from previous years; 5. That it has underpaid its property taxes; 6. That its board of directors has suspended dividends to shareholders; and 7. That its chief executive officer has resigned. On July 30, 2003, the Fund, due to its continued dissatisfaction with the management of Energy West, notified Energy West of its intent to nominate five director candidates for election at the 2003 annual meeting of shareholders. Energy West notified the Fund by letter dated August 12, 2003 that the Fund's director candidates would not be included in Energy West's proxy materials for the 2003 annual meeting of shareholders. Because the Fund was denied the opportunity to exercise its right to nominate director candidates for inclusion in Energy West's proxy materials, the Fund was left with no other alternative but to engage in a proxy solicitation in opposition to Energy West's board of directors in order to elect its director candidates at the 2003 annual meeting of shareholders. Energy West filed proxy materials with the Securities and Exchange Commission (the "SEC") on October 9, 2003 setting the 2003 annual meeting for October 31, 2003. The Fund, with other interested shareholders, formed the Committee to Re-Energize Energy West (the "Committee") in order to oppose the incumbent board of directors of Energy West and to nominate a slate of directors for election at the 2003 annual meeting of shareholders. On October 15, 2003, Energy West filed additional proxy materials with the SEC and postponed the annual meeting of shareholders until November 12, 2003. The Committee filed proxy materials with the SEC on October 16, 2003 seeking to elect three, rather than five, director candidates at the 2003 annual meeting of shareholders. 2 Both the Committee and Energy West have retained proxy soliciting firms to assist in the solicitation of proxies from shareholders. Due to the nature of election of directors by cumulative voting, the proxy soliciting firms are able to provide the parties with the anticipated outcome of the election prior to the commencement of the annual meeting. In an attempt to circumvent the election process, Energy West filed a press release on November 11, 2003 at approximately 2:15 a.m. Eastern Standard Time announcing that the 2003 annual meeting of shareholders had been rescheduled for December 3, 2003. Energy West claimed that its largest stockholder, Ian Davidson, had been unable to vote his shares of Energy West stock due to "technical" matters with respect to Mr. Davidson's reporting obligations relating to his ownership of the stock. In an attempt to entrench the current board of directors, Energy West postponed the annual meeting of shareholders less than 24 hours prior to its commencement upon the realization that the outcome of the election would result in the removal of at least two of its incumbent directors. B. LAW & ARGUMENT Under Montana law, in order to obtain a temporary restraining order, a plaintiff must show irreparable injury. Curran v. Dept. of Highways, 258 Mont. 105, 852 P.2d 544, 50 St. Rep. 450 (1993); Gabriel v. Wood, 261 Mont. 170, 862 P.2d 42, 50 St. Rep. 1246 (1993). Mont. Tavern Ass'n. v. St., 224 Mont. 258, 729 P.2d 1310, 43 St. Rep. 2180 (1986). In particular, Montana Code Annotated Section 27-19-35 states: WHEN RESTRAINING ORDER MAY GRANTED WITHOUT NOTICE. A temporary restraining order may be granted without written or oral notice to the adverse party or his attorney only if: (1) it clearly appears from specific facts shown by affidavit or by the verified complaint that a delay would cause immediate and irreparable injury to the applicant before the adverse party or his attorney could be heard in opposition . . . Generally, when the equitable remedy of injunction is sought, a plaintiff must demonstrate, by clear and convincing evidence, the actual irreparable harm. An irreparable harm 3 consists of the substantial threat of material injury that cannot be compensated with monetary damages. The purpose of a temporary restraining order is "to prevent threatened wrong, further injury, and irreparable harm until the rights of the parties are adjusted." 43 C.J.S. Injunctions 5; Montana Power Co. v. Environmental Protection Agency, 429 F. Supp. 683 (1977); Sheridan County Electric Co-Op v. Ferguson, 124 Mont. 543, 222 P.2d 597 (1951); Hansen v. Galiger, 123 Mont. 101, 208 P.2d 1049. In Montana, the granting of a temporary restraining order lies with the sound discretion of the trial court. Atkinson v. Roosevelt County, 66 Mont. 411, 214 P. 74 (1923); Rea Bros. Sheep Co. v. Rudi, 46 Mont. 149, 127 P. 85 (1912). There is "no Montana statute that requires a party to submit a formal, written application or petition for an injunction." H.D. Buelow v. Willems 225 Mont. 225, 731 P.2d. 1309 (1987). In the present case, an injunction is necessary because Defendants' conduct is a thinly veiled attempt to prevent the Fund from electing the directors that it supported through its proxy campaign. Even more egregious is that the Defendants wrongfully attempted to circumvent the will of all the shareholders who intended to cast their vote at the November 12, 2003 annual meeting. An examination of the irrefutable facts demonstrates that there is no interest to the shareholders by postponing the annual meeting. In fact, the postponement of the annual meeting may defeat the efforts of the Fund and may destroy the intent of the shareholders that are presently willing and able to vote for the Directors of Energy West. In such a circumstance irreparable harm may be presumed. See Aprahamian v. HBO & Company, 531 A.2d 1204 (1987), attached as Exhibit A. The Aprahamian case involves facts that are substantially similar to present case. In Aprahamian, the plaintiffs, a committee opposed to the reelection of six directors of the corporate defendant, sought a preliminary injunction to prevent the defendants, the corporation 4 and its directors, from postponing the annual meeting past a certain date. Id. at 1205-1206. The Court stated that "an annual meeting could be postponed if necessary in the interests of the stockholders." Id. at 1207 (citing Steinberg v. American Bantam, W.D. Pa., 76 F. Supp 426 (1948)). The Court also stated that "[t]he burden of persuasion, however, must be upon those seeking to postpone the annual meeting to show that the postponement is in the best interests of the stockholders." Id. The Court further determined that the defendants were not able to meet their burden because the facts did not show that the stockholders would benefit from the postponement. Id. at 1208. Finally, the Court held that the plaintiffs' preliminary injunction should be granted because "irreparable harm may be presumed" when they have spent "considerable sums of money" in a proxy contest and the meeting is being postponed to defeat the will of the stockholders. The holding in the Aprahamian case is directly applicable to this matter in that the directors here also seek to delay the annual meeting in an effort to avoid an unfavorable board of directors election. Following the decision of Aprahamian, this Court should find that the postponement of the annual meeting is not in the best interest of the Fund and the Energy West shareholders. As the Fund and the shareholders face the loss of their rights, the harm they will suffer cannot be remedied with money damages, and injunctive relief is appropriate. Moreover, the Fund merely requests that the annual shareholder meeting be held as scheduled and allow the Energy West shareholders the right to cast their vote without fear that the corporation and/or its directors will manipulate its corporate governance by diluting or divesting their voting rights in an attempt to entrench the current board of directors. If there is any harm to Defendants, it is minimal and is far outweighed by the significant harm to the Fund and the all shareholders if the Order is not granted. 5 As a result, this Court should grant the Fund's request for an entry of a temporary restraining order to enjoin the Defendants from postponing the annual shareholders' meeting of Defendant Energy West. Respectfully submitted, /s/ Steven T. Potts Steven T. Potts THOMPSON, POTTS & DONOVAN, P.C. 600 Central Plaza, Suite 201 Great Falls, Mt 59403-2799 6 EX-7.4 5 l04165aexv7w4.txt EXHIBIT 7.4 Exhibit 7.4 Dirk M. Sandefur, District Judge Dept. 4, Montana 8th Judicial District Cascade County Courthouse - Rm. 203 415 2nd Avenue North Great Falls, MT 59401 Ph: (406) 771-6566 MONTANA EIGHTH JUDICIAL DISTRICT COURT, CASCADE COUNTY - ------------------------------------------------------------------------------ TURKEY VULTURE FUND XIII, LTD, Cause No.: DDV-03-1214 Plaintiff, TEMPORARY RESTRAINING ORDER vs. ENERGY WEST, INC., et al, Defendants. - ------------------------------------------------------------------------------ On November 12, 2003, at 9:10 a.m., Plaintiff Turkey Vulture Fund XIII, LTD, filed a Verified Complaint For Preliminary And Permanent Injunction (Doc. 1). At 9:19 a.m., on this date, Plaintiff subsequently filed a Motion For Temporary Restraining Order And Memorandum In Support (Doc. 2). At approximately 9:30 a.m. on November 12, 2003, Plaintiff, by and through counsel Steven T. Potts, appeared in open court at the end of the regularly scheduled uncontested hearings and presented, ex parte, the above-referenced contested motion for temporary restraining order. The Court also allowed out-of state counsel, Marc Krantz and Joe Altomare, to address the Court on a limited basis on behalf of the plaintiff. Upon review and consideration of the above-referenced pleadings, the Court conducted an ex parte hearing on Plaintiff's motion, a transcript of which is filed in the above-captioned matter as of this date. At approximately 10:30 a.m., from the bench, the Court made and issued the following general findings of fact, conclusions of law, and order from the bench based on Plaintiff's verified complaint: 1 (1) the legal and factual status quo in this case is that Defendant Energy West, Inc., pursuant to its own bylaws, was committed to conduct an annual shareholders' meeting and election of directors on November 12, 2003 at 9:00 a.m.; (2) for reasons that are neither entirely clear to the Court nor adjudicated of record, Defendant Energy West, Inc., has attempted to delay the annual meeting and election of directors, apparently to the benefit one faction of shareholders and to the detriment of another faction of shareholders; (3) a change in the status quo would cause immediate and irreparable injury to Plaintiff and other shareholders by denying them the right and opportunity to an annual election of directors on November 12, 2003, pursuant to the company's bylaws, by all shareholders qualified to vote as of that date pursuant to the company's bylaws and applicable rules of law, and accordingly; (4) Defendant Energy West, Inc. is hereby ordered to duly schedule, notice, and conduct its annual shareholders' meeting and election of directors on or before Monday, November 24, 2003. In order to preserve the status quo, the Court further orders that: (A) the only shareholders and proxies eligible to vote are those that were eligible, under the Energy West bylaws and applicable law, on November 12, 2003; and (B) all parties are hereby restrained from engaging in any additional proxy solicitation efforts regarding the subject directors election. The Court shall conduct a formal hearing on Friday, November 21, 2004, on Plaintiff's motion for preliminary injunction. (Hearing Transcript, November 12, 2003) (paraphrased). Accordingly, pursuant to Sections 27-19-314, 27-19-315, and 27-19-316, MCA, the Court enters the following findings of fact, conclusions of law, and temporary restraining order to formalize the Court's bench order issued at approximately 10:30 a.m. on November 12, 2003: FINDINGS OF FACT 1. Plaintiff, Turkey Vulture Fund XIII, LTD, is a shareholder of Defendant Energy West, Inc. The other defendants are members of the board of directors of Energy West. 2. Pursuant to its bylaws, Energy West duly scheduled a meeting of shareholders and an election of directors for November 12, 2003, at 9:00 a.m. in Great Falls, Montana. 2 3. On the afternoon of November 11, 2003, Energy West announced its intent to postpone the November 12th meeting and did in fact do so. 4. Prior to November 11, 2003, Plaintiff and other shareholders sought to have three directors elected to the board of directors of Energy West and engaged in expensive proxy solicitation and other related efforts to oppose the incumbent board of directors of Energy West. 5. Plaintiff's manager and other representatives traveled to Great Falls, Montana, prior to November 11, 2003, to attend the previously-scheduled shareholder meeting. 6. Plaintiff's has alleged, and it appears to the Court on an ex parte basis, that the postponement of the meeting may benefit the election of incumbent directors to the detriment of other candidates and supporting shareholders. 7. Delaying the shareholder meeting to December 3, 2003, will result in immediate and irreparable injury to Plaintiff and other shareholders by denying them the right and opportunity to an annual meeting and election of directors on November 12, 2003, pursuant to the company's bylaws, by all shareholders qualified to vote as of that date pursuant to the company's own bylaws and applicable rules of law. 8. Plaintiff has provided notice by telephone and facsimile of its verified complaint and motion for a temporary restraining order to Defendants' Kansas City counsel. CONCLUSIONS OF LAW 1. Pursuant Title 35 and Title 27, Chapter 19, MCA, this Court has jurisdiction over this action. 2. Plaintiff's verified complaint satisfies the requirements of Sections 27-19-315 and 27-19-303, MCA. 3. Pursuant to Section 27-19-301, MCA, Plaintiff has provided reasonable notice by telephone and facsimile of its verified complaint and motion for a temporary restraining order to Defendants' Kansas City counsel. 4. At the time of filing of Plaintiff's Verified Complaint and motion for temporary restraining order, the legal and factual status quo was that that Defendant Energy West, Inc., pursuant to its own bylaws, was committed to conduct an annual shareholders' meeting and election of directors on November 12, 2003 at 9:00 a.m.; 5. A substantial likelihood exists that a change in the status quo, i.e., postponement of the Energy West annual meeting and directors election, would result in immediate and irreparable injury to Plaintiff and other shareholders by denying them the right and opportunity to an annual meeting and election of directors on November 12, 2003, by all shareholders qualified to vote as of that date 3 pursuant to the company's own bylaws and applicable rules of law. 6. Equitable relief via temporary restraining order is proper because Plaintiff has no other adequate legal remedy. TEMPORARY RESTRAINING ORDER Accordingly, based on the foregoing findings of fact and conclusions of law, the Court hereby enters the following temporary restraining order pursuant to Sections 27-19-314 through 316, MCA: (1) Defendant Energy West, Inc. is hereby ordered to duly schedule, notice, and conduct its annual shareholders' meeting and election of directors on or before Monday, November 24, 2003; (2) in order to preserve the status quo, the Court further orders that: (A) the only shareholders and proxies eligible to vote are those that were eligible, under the Energy West bylaws and applicable law, on November 12, 2003; and (B) all parties are hereby restrained from engaging in any additional proxy solicitation efforts regarding the subject directors election; and (3) pursuant to Section 27-19-318, MCA, all parties shall appear before the Court for hearing on Plaintiff's motion for temporary injunction on Friday, November 21, 2003, at 9:00 a.m. SO ORDERED this 12th day of November, 2003, at approximately 10:30 a.m., Mountain Standard Time. /s/ Dirk M. Sandefur --------------------------------- Dirk M. Sandefur District Judge cc: Plaintiff Defendants 4 -----END PRIVACY-ENHANCED MESSAGE-----