This is a securities class action lawsuit against Thornburg Mortgage.
It operates as a residential mortgage lending company, which originates, acquires and retains investments in adjustable and variable rate mortgage (ARM) assets.
The class action complaint alleges that the Thornburg Board has placed its own self-interest above those of Thornburg's shareholders by:
(a) agreeing to sell 90% of the Company to MatlinPatterson in return for grossly inadequate consideration in the form of a risk-free loan of approximately $1.3 billion; and
(b) launching a coercive tender offer aimed at eliminating Thornburg's preferred shareholders, simultaneously diluting and devaluing the common shares held by public shareholders
The class action complaint alleges, among other things, that the Proxy fails to provide shareholders with the following material information:
(a) any projections, estimates and/or information concerning Thornburg's future business and financial prospects which would allow shareholders to make an informed decision as to whether to tender their shares in the Tender Offer;
(b) any projections, estimates and/or information which would allow shareholders to evaluate any strategic alternative to the Tender Offer;
(c) any projections or estimates which would allow shareholders to evaluate the impact of a potential bankruptcy on Thornburg and its preferred shareholders who have the right to a $25.00 per share liquidation preference;
(d) any information regarding the viability of any strategic alternatives which the Board considered and/or information relied upon relating to those alternatives;
(e) any information concerning the potential or actual conflicts between and among members of the Board, Thornburg and MatlinPatterson and the other parties to an agreement with MatlinPatterson, pursuant to which MatlinPatterson would lend Thornburg approximately $1.35 billion at an initial interest rate of 18% per annum (the 'Agreement');
(f) any information, analysis, valuation, projections and/or estimates prepared by, or opinion rendered by, any financial advisor at the behest of the Board concerning the Tender Offer, the Agreement, or any strategic alternative considered by the Board.
Name (Stock Symbol)
Thornburg Mortgage, Inc. (THMRQ.PK)
Thornburg Mortgage, Inc., now in bankruptcy, operates as a residential mortgage lending company. It originates, acquires, and retains investments in adjustable and variable rate mortgage (ARM) assets.
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