NEW YORK, Aug. 2, 2018 /PRNewswire/ -- Mudrick Capital
Management, L.P., the largest independent shareholder in
Globalstar, Inc. (NYSE American: GSAT), announced yesterday that
Globalstar has just terminated its unfair merger agreement to
acquire FiberLight and several other assets owned by the Thermo
Companies, which are controlled by Globalstar's Chief Executive
Officer and controlling shareholder, Jay
Monroe. As Mudrick Capital, counseled by Selendy &
Gay PLLC, explained in a complaint it filed on May 17, 2018 in Delaware's Court of Chancery, this merger
would have resulted in Globalstar and its minority shareholders
materially overpaying for assets already controlled by Mr. Monroe,
while at the same time significantly diluting its minority
shareholders' interests in Globalstar. Moreover, the merger
would have been funded by Globalstar stock that Mr. Monroe himself
has conceded is vastly undervalued, thereby transferring a massive
amount of wealth from Globalstar's public shareholders to Mr.
Monroe. Mudrick Capital's complaint sought corporate books
and records, including e-mails, pursuant to Section 220 of
Delaware's General Corporation
Law, in order to permit Mudrick Capital to meaningfully investigate
the serious wrongdoing it has suspected at Globalstar.
On July 3, 2018, this matter was
tried in the Delaware Court of
Chancery, with Jason Mudrick, the
President and Chief Investment Officer of Mudrick Capital,
testifying as the sole witness. Following this trial, the
Court of Chancery on July 31, 2018
issued an order granting Mudrick Capital's demand. In its
opinion, the Court of Chancery found that Mr. Mudrick has testified
credibly to the wrongdoing he suspected at Globalstar, and ordered
Globalstar to produce nearly all corporate books and records
sought, including e-mails from each of Globalstar's
C.E.O. Jay Monroe, its General
Counsel, and the chair of the Special Committee that had approved
the unfair merger. One day after this ruling, Globalstar
terminated its merger agreement with the Thermo Companies.
Jason Mudrick, the President and
Chief Investment Officer of Mudrick Capital, has released a
statement praising the Court's ruling: "We are gratified by
the Court's decision ordering Globalstar to produce the corporate
books and records we sought, including e-mails. These
documents are crucial to our ability to investigate the wrongdoing
we have suspected at Globalstar, and to take meaningful steps to
protect minority shareholders from such actions in the
future. We believe that Globalstar's decision to terminate
its planned merger with the Thermo Companies represents a victory
for all of Globalstar's independent shareholders. We remain
committed to protecting the rights of Globalstar's minority
shareholders and intend to continue investigating the wrongdoing we
suspect at Globalstar."
Jordan Goldstein, a partner at
Selendy & Gay PLLC, which serves as lead counsel in this
matter, has also released a statement praising Mudrick Capital's
decision to initiate this proceeding. "Mudrick Capital's
efforts in seeking books and records to meaningfully investigate
suspected wrongdoing at Globalstar has now been validated by the
Court of Chancery. The Court's decision to require the
production of e-mails and other documents demonstrates the strength
of our allegations as to the unfairness of the proposed merger.
Globalstar's resulting decision to terminate the merger just
one day after the Court's ruling confirms that Mudrick Capital's
efforts in this proceeding have been instrumental in protecting
Globalstar's independent shareholders from this unfair
merger."
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SOURCE Selendy & Gay PLLC