Upper Deck files suit against Topps, seeks to postpone Topps merger with Madison Dearborn, Tornante

By Lisa Kerner

Charlotte, N.C., June 6 - The Upper Deck Co. and Northwood Investors LLC filed a lawsuit in the Delaware Court of Chancery against the Topps Co., Inc., certain company directors, the Tornante Co. LLC, funds affiliated with Madison Dearborn Partners, LLC and other affiliates.

A hearing is set for June 11, according to a form 8-K filing with the Securities and Exchange Commission.

The lawsuit claims that Topps and its directors breached a March 19 confidentiality agreement entered into during the go-shop period under Topps' March 5 plan of merger agreement with Madison Dearborn and Tornante. In addition, the lawsuit claims Topps directors "fraudulently induced" Upper Deck into entering into the confidentiality agreement.

Topps agreed to be acquired by Tornante and Madison Dearborn for $9.75 per share in cash in a transaction valued at $385.4 million. The transaction includes a $12 million termination fee.

Tornante and Madison Dearborn are accused in the lawsuit of aiding and abetting Topps directors in breaching their fiduciary duties to stockholders.

The Upper Deck plaintiffs are seeking relief in the form of an injunction preventing Topps from enforcing the standstill provisions of the confidentiality agreement and prohibiting Upper Deck from engaging in a tender offer or soliciting proxies.

Upper Deck is also asking for an injunction preventing Topps from holding its special meeting of stockholders on June 28 for the purpose of voting on the merger agreement until the standstill obligation is lifted. Additional relief is sought in the form of damages, fees and costs associated with the lawsuit.

On May 24, Topps received an unsolicited indication of interest from Upper Deck to acquire Topps for $10.75 per share. Upper Deck was previously interested in offering the same price for the company during Topps' go-shop process under its agreement with Tornante and Madison Dearborn.

Topps' board doubted whether Upper Deck would be capable of financing its proposed acquisition and considered the transaction risky, according to a prior news release.

Tornante and Madison Dearborn granted a waiver allowing Topps to engage in discussions and negotiations with Upper Deck.

Upper Deck is a sports and entertainment-publishing company based in Carlsbad, Calif.

New York-based Topps creates and markets sports and related cards, entertainment products and confectionery.

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