In June 2007, Bass, Berry & Sims represented Genesco Inc. in connection with the negotiation of a merger agreement for Genesco to be acquired by Finish Line for $1.5 billion. When the credit markets subsequently took a dive, Finish Line and its lender, UBS, refused to consummate the deal accusing the company of withholding key financial information and citing a material adverse change based on Genesco's weaker than expected results from the second and third quarter of 2007. Our litigation team filed suit (Genesco, Inc. v. Finish Line, Inc., Headwind, Inc., UBS Securities LLC and UBS Loan Finance LLC) to enforce the agreement asserting that there had been no fraud, that Genesco's recent performance was the result of general economic conditions which did not allow Finish Line to escape its obligations under the merger agreement, and that the merger agreement should be enforced as written.
On December 27, 2007, Tennessee Chancery Court Judge Ellen Hobbs Lyle ruled in favor of Genesco, dismissing all of Finish Line's arguments and rejecting claims that Genesco had committed fraud by concealing financial information and affirming that Finish Line had breached its merger agreement. Most significantly, Chancellor Lyle ordered that Finish Line must specifically perform its obligations under the merger agreement and close the transaction. The litigation was subsequently settled with Finish Line and UBS paying Genesco $175 million in cash plus 12% of Finish Line stock.
Genesco Inc. (NYSE: GCO) is a publicly owned specialty retailer of branded footwear, licensed and branded headwear and licensed sports apparel and accessories and is a wholesaler of branded and licensed footwear.