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Litigation
6 Months Ended
Jul. 02, 2011
Litigation  
Litigation

13. Litigation

 

On July 8, 2011, Victoria Shaev, filed a complaint (the "Shaev Complaint") on behalf of herself and as a putative class action on behalf of the Company's public shareholders against EMS, certain members of the Board of Directors (the "Individual Defendants"), certain members of management, Honeywell and Purchaser in the Superior Court of Fulton County of the State of Georgia. In the Shaev Complaint, plaintiff alleges, among other things, that the Individual Defendants breached their fiduciary duties in connection with the Offer and Merger by failing to engage in a fair sale process and by providing materially misleading and incomplete information regarding the transaction. The plaintiff also alleges that the Company, Parent and Purchaser have aided and abetted the alleged breach of fiduciary duties. The Shaev Complaint seeks judicial action, among other things, (i) declaring that the action is properly maintainable as a class action and certifying plaintiff as class representative and plaintiff's counsel as class counsel, (ii) preliminary and permanently enjoining defendants from effectuating the transaction, (iii) declaring the transaction void and ordering rescission if the transaction is consummated, (iv) requiring disgorgement and imposing a constructive trust on all property and profits that the defendants receive as a result of their wrongful conduct, and (v) awarding damages, including rescissory damages, and reasonable fees and expenses. The Company and the other defendants believe the plaintiff's allegations lack merit, and are contesting them vigorously.

 

The Company is involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.