Stephens Vs. American Equity I by sry33301

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									                                                EFiled: Oct 22 2010 12:05PM EDT
                                                Transaction ID 33957686
                                                Case No. 5919-
             IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                                   )
LEONARD BECKER, on behalf of himself and
all others similarly situated,     )
                                   )
               Plaintiff,          )
                                   )
     vs.                           )                     Civil Action No. __________
                                   )
                                   )
AMERICAN COMMERCIAL LINES INC.,    )
CLAYTON YEUTTER, RICHARD HUBER,    )
EMMANUEL ROUVELAS, MICHAEL RYAN, )
CHRISTOPHER WEBER, NILS LARSEN,    )
PLATINUM EQUITY, LLC, FINN HOLDING )
CORPORATION, and FINN MERGER       )
CORPORATION,                       )
                                   )
                 Defendants.       )



                         VERIFIED CLASS ACTION COMPLAINT


       Plaintiff Leonard Becker (“Plaintiff”), by his attorneys, on behalf of himself and those

similarly situated files this action against the defendants and alleges upon information and belief,

except for those allegations that pertain to it, which are alleged upon personal knowledge, as

follows:

       1.      Plaintiff brings this shareholder class action on behalf of himself and all other

public shareholders of American Commercial Lines Inc. (“American” or the “Company”) against

the Company’s Board of Directors (the “Board” or the “Individual Defendants”), Finn Holding

Corporation (“Finn”), Platinum Equity, LLC (“Platinum”) and Finn Merger Corporation (the

“Merger Sub”) (Finn, Platinum and the Merger Sub are collectively referred to as the

“Platinum”)(collectively referred to as “Defendants”), for breaches of fiduciary duties in

conjunction with the proposed buyout and acquisition of American by Finn, an affiliate of


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Platinum. Under the terms of a definitive merger agreement announced on October 18, 2010,

American shareholders other than GVI Holdings, Inc. (“GVI”) will receive $33.00 in cash for

each share of American common stock they hold (the “Proposed Acquisition”). If the

transaction closes before the proposed closed date of December 31, 2010, GVI will receive

$31.25 in cash for each share of American common stock it holds. The transaction is valued at

approximately $777 million.

       2.      GVI is American’s largest shareholder, owning approximately 25.26% of

American’s outstanding common stock. GVI has entered into a Voting Agreement in support of

the Proposed Acquisition. Additionally, the Individual Defendants as well as Company officers

owning approximately 4% of American common stock have likewise unanimously pledged their

votes in support of the Proposed Acquisition. As a whole, close to 30% of American common

stock has already been pledged in support of the Proposed Acquisition.

       3.      If the Proposed Acquisition is approved, the Individual Defendants will have

breached their fiduciary duties of loyalty and due care by, inter alia, agreeing to sell American

without first taking steps to ensure that Plaintiff and Class members (defined below) would

obtain adequate and fair consideration under the circumstances. As alleged herein, Platinum

aided and abetted the Individual Defendants’ breaches of fiduciary duty.

       4.      Plaintiff seeks to enjoin the Proposed Acquisition or, alternatively, to recover

damages in the event that the Proposed Acquisition is consummated. The consideration offered

to American’s public shareholders is grossly unfair and inadequate.




                                                 2
                                       THE PARTIES

       5.     Plaintiff Leonard Becker is, and has been at all relevant times a shareholder of

American.

       6.     American Commercial Lines Inc., a Delaware corporation, is a leader in marine

transportation and manufacturing, delivering premium transportation services and solutions to

meet the evolving needs of its customers. Headquartered in Jeffersonville, Indiana, American

has operated on the United States Inland Waterways System, which consists of the Mississippi

River System, its connecting waterways and the Gulf Intracoastal Waterways, since 1915. The

Company’s common stock is traded on NASDAQ under the symbol “ACLI.” As of October 20,

2010, the Company had approximately 12,830,000 shares of common stock outstanding.

       7.     Defendant Clayton Yeutter, (“Yeutter”) has served as Chairman of the Board of

Directors of the Company since January 11, 2005.

       8.     Defendant Richard Huber, (“Huber”) has been a Director of the Company since

January 11, 2005. Huber served as a director of American Commercial Lines LLC, the

predecessor entity of the Company from 2000 to January 2005 and as Interim Chief Executive

Officer of American Commercial Lines LLC from April 2004 to January 2005.

       9.     Defendant Nils Larsen, (“Larson”) has served as a Director of the Company since

January 11, 2005.

       10.    Defendant Emmanuel Rouvelas (“Rouvelas”) has been a Director of the Company

since January 11, 2005.

       11.    Defendant Michael Ryan, (“Ryan”) serves as a Director of the Company. Ryan

was named President and Chief Executive Officer of American effective March 1, 2008. Prior to

that, he served as Senior Vice President of Sales and Marketing since coming to American in

November 2005.

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       12.     Defendant Christopher Weber, (“Rosenthal”) has been a Director of the Company

since January 11, 2005.

       13.     Individual Defendants Clayton Yeutter, Richard Huber, Nils Larsen, Emmanuel

Rouvelas, Michael Ryan and Christopher Weber are, and at all times relevant hereto have been,

directors of American, and are referred to herein as “Individual Defendants” or “Director

Defendants.”

       14.     The Director Defendants, by reason of their corporate directorships and/or

executive positions, are fiduciaries to and for the Company’s stockholders, which fiduciary

relationship required them to exercise their best judgment, and to act in a prudent manner and in

the best interests of the company’s stockholders.

       15.     Each Director Defendant herein is sued individually, as a conspirator and aider

and abettor, as well as in their capacity as an officer and/or director of the Company, and the

liability of each arises from the fact that he has engaged in all or part of the unlawful acts, plans,

schemes, or transactions complained of herein.

       16.     Defendant Platinum Equity, LLC (“Platinum”) is a global M&A&O firm

specialized in mergers, acquisitions and operations of companies that provide mission-critical

products, services and solutions in diverse industries. Platinum is headquartered in Los Angeles,

California.

       17.     Defendant Finn Holding Corporation is an affiliate of Platinum and a Delaware

corporation.

       18.     Defendant Finn Merger Corporation (the “Merger Sub”) is a Delaware

corporation and a wholly-owned subsidiary of Finn.




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                                SUBSTANTIVE ALLEGATIONS

        19.     On October 18, 2010, American announced that it would be acquired by an

affiliate of Platinum, Finn Holding Corporation, in a transaction valued at $777 million. The

press release states in relevant part:

        JEFFERSONVILLE, IN--(Marketwire - 10/18/10) - American Commercial Lines
        Inc. (NASDAQ:ACLI - News) ("ACL" or the "Company"), one of the largest and
        most diversified inland marine transportation and service companies in the United
        States, today announced that it has entered into a definitive merger agreement to
        be acquired by an affiliate of Platinum Equity, in a transaction with an enterprise
        value of approximately $777 million. ACL's Board of Directors, acting on the
        unanimous recommendation of a Special Committee of independent directors,
        approved the agreement and has recommended the approval of the transaction to
        ACL's stockholders.

        Under the terms of the agreement, ACL stockholders, other than GVI Holdings,
        Inc. and certain of its affiliates ("GVI") will receive $33.00 in cash for each share
        of ACL common stock they hold. GVI will receive $31.25 in cash for each share
        of ACL common stock it holds if the transaction closes before December 31, 2010
        and $33.00 per share thereafter. GVI has entered into a Voting Agreement to
        support the transaction.

        "Following thorough analysis by a Special Committee of independent directors,
        our Board of Directors has determined that this transaction offers the best value
        for our stockholders," said Clayton Yeutter, chairman of the board.

        "ACL is a strong company with a dedicated team that has made significant
        improvements over the past two and a half years," said Mike Ryan, ACL
        president and chief executive officer. "We are optimistic that this progress,
        coupled with Platinum Equity's financial resources and experience in operations,
        will position ACL to continue executing our strategic initiatives."

        "ACL has a rich heritage and a strong market position," said Louis Samson, the
        Platinum Equity principal who is leading the ACL acquisition. "ACL is a great fit
        for Platinum Equity. We share the company's commitment to safety, customer
        service, innovation, and integrity. We look forward to working closely with Mike
        Ryan and his management team, as well as all of the ACL employees, and
        customers."

        The transaction is subject to customary closing conditions, including the
        expiration or earlier termination of the Hart-Scott Rodino waiting period and the
        approval of ACL's stockholders, but is not subject to any condition with regard to
        the financing of the transaction. Financing consists of a combination of equity
        contributed by Platinum Equity and debt financing provided by Wells Fargo

                                                 5
       Capital Finance, LLC. ACL expects the transaction to close in the fourth quarter
       of 2010. ACL intends to keep the Company's existing senior secured notes
       outstanding and will comply with the indenture governing the notes, including
       making any required offer to purchase the notes upon a change of control.

       Under the terms of the merger agreement, ACL may solicit acquisition proposals
       from third parties for a period of 40 calendar days continuing through November
       27, 2010. It is not anticipated that any developments will be disclosed with regard
       to this process unless ACL's Board of Directors makes a decision with respect to a
       potential superior proposal. There are no guarantees that this process will result in
       a superior proposal.

       24.     The Company’s recent financial performance and analyst expectations establish

that the Finn Defendant’s offer is woefully inadequate.

       25.     Since dropping to a year-to-date low of $15.24 per share on February 1, 2010,

American’s stock has seen its value steadily increase. Over the past six months alone,

American stock has risen in value by greater than 40%. Of even greater significance, since

June 9, 2010 American stock is up over 63%. Moreover, as recently as October 15, 2010,

American common stock traded at $33.67 per share – above the transaction price.

       26.     The upward trajectory of American’s stock price is likely to continue. As the

Company stated in its most recent 10K, “[h]istorically [American] generates stronger financial

results in the last half of the year, driven by demand from the grain harvest and the impact of that

demand on grain and spot shipping rates.”

       27.     On October 11, 2010, BB&T Capital Markets upgraded its opinion of American

stock from “hold” to “buy” and at least five other analysts have graded American as a “strong

buy” in the last two months alone.

       28.     Additionally, at least one analyst has set a target price of $50.00 per share for

American common stock.




                                                 6
       29.     Commenting on the deal, Alex Brand, a stock analyst with Stephens Inc., stated,

“[s]hareholders might find the $33 per share price too low,” Brand further noted that Platinum’s

offer was below the stock’s closing price of $33.31 on Friday October 15, 2010, which is “very

unusual” for a company that is not teetering on bankruptcy. Brand said the $33 price is a “very

attractive” deal for Platinum.

       30.     Brand stated that the deal is being driven by Sam Zell [financier of GVI

Holdings], which owns a quarter of the Company, “This is basically his deal, so the question is,

will the other 75% of shareholders vote in favor of the deal? I think what the stock is telling you

today is, not at $33.”

       31.     In an article in the Indiana Economic Digest, Morgan Keegan analyst Chaz Jones

agreed, saying the offer “likely understates the value,” of the Company. Jones added, “We feel

that a higher valuation is likely warranted for a long-term buyer of American, we can’t speculate

on whether private equity players will feel the same way.”

       32.     Echoing these sentiments, American’s stock opened for trading on October 21,

2010 at $35.10, well above the $33 offer price and the third straight day since the announcement

of the Proposed Acquisition that the stock opened above $33 and at a price greater than what it

closed at the day prior- a strong indication that those following the stock believe it to be worth

more than the offer price of $33 per share.

       33.     Clearly, based on the above, the Proposed Acquisition will allow Platinum to

purchase American at an unfairly low price while availing itself of American’s significant value

and upside or long-term potential.

       34.     Moreover, the Merger Agreement contains certain provisions that unfairly favor

Platinum by making an alternative transaction either prohibitively expensive or otherwise



                                                 7
impossible. For example, the Merger Agreement contains a termination fee provision that

requires American to pay $14,000,000.00 to Platinum if the Merger Agreement is terminated

under certain circumstances.

       35.     The termination fee payable under this provision will make the Company that

much more expensive to acquire for potential purchasers, while resulting in a corresponding

decline in the amount of consideration payable to American shareholders.

       36.     The Merger Agreement also contains a “no shop” provision that restricts

American from considering alternative acquisition proposals by, inter alia, constraining

American’s ability to solicit or communicate with potential acquirers or consider their proposals.

Specifically, the provision prohibits the Company from soliciting any alternative proposal after a

brief defined time period, but permits the Board to consider a “bona fide written Acquisition

Proposal” if it constitutes or is reasonably calculated to lead to a “Superior Proposal” as defined

in the Merger Agreement.

       37.     Moreover, the Agreement further reduces the possibility of a topping offer from

an unsolicited purchaser. Here, Defendants agreed to provide Platinum information in order to

match any other offer, thus providing Platinum access to the unsolicited bidder’s financial

information and giving Platinum the ability to top the superior offer. Thus, a rival bidder is not

likely to emerge with the cards stacked so much in favor of Platinum.

       38.     Accordingly, the Company’s true value is compromised by the consideration

offered in the Proposed Acquisition and the Proposed Acquisition is the product of the Board’s

breaches of fiduciary duty, aided and abetted by Platinum.




                                                 8
                 THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

         39.    In any situation where the directors of a publicly traded corporation undertake a

transaction that will result in either a change in corporate control or a break-up of the

corporation’s assets, the directors have an affirmative fiduciary obligation to act in the best

interests of the company’s shareholders, including the duty to obtain maximum value under the

circumstances. To diligently comply with these duties, the directors may not take any action

that:

                (a)     adversely affects the value provided to the corporation’s shareholders;

                (b)     will discourage or inhibit alternative offers to purchase control of the

corporation or its assets;

                (c)     contractually prohibits them from complying with their fiduciary duties;

and/or

                (d)     will provide the directors, executives or other insiders with preferential

treatment at the expense of, or separate from, the public shareholders, and place their own

pecuniary interests above those of the interests of the company and its shareholders.

         40.    In accordance with their duties of loyalty and good faith, the Individual

Defendants, as directors and/or officers of American, are obligated to refrain from:

                (a)     participating in any transaction where the directors’ or officers’ loyalties

                are divided;

                (b)     participating in any transaction where the directors or officers are entitled

                to receive a personal financial benefit not equally shared by the public

                shareholders of the corporation; and/or

                (c)     unjustly enriching themselves at the expense or to the detriment of the

                public shareholders.

                                                  9
       41.       Plaintiff alleges herein that the Individual Defendants, separately and together, in

connection with the Proposed Acquisition, violated, and are violating, the fiduciary duties they

owe to Plaintiff and the other public shareholders of American, including their duties of loyalty,

good faith, candor, and due care. As a result, Plaintiff and Class members will not receive

adequate or fair or value for their American common stock in the Proposed Acquisition.

       42.       As a result of the Individual Defendants’ breaches of fiduciary duty, the

Company’s public shareholders will not receive adequate or fair value for their common stock in

the Proposed Acquisition.

                                CLASS ACTION ALLEGATIONS

       43.       Plaintiff brings this action individually and as a class action on behalf of all

holders of American common stock who are being and will be harmed by the Defendants’

actions, described herein (the “Class”). Excluded from the Class are Defendants and any person,

firm, trust, corporation or other entity related to or affiliated with any Defendant

       44.       This action is properly maintainable as a class action because, inter alia:

                 (a)    The Class is so numerous that joinder of all members is impracticable.

American’s stock is publicly traded on the NASDAQ and there are approximately 12.8 million

outstanding shares. Plaintiff believes that there are hundreds if not thousands of holders of such

shares. Moreover, the holders of these shares are geographically dispersed throughout the

United States;

                 (b)    There are questions of law and fact which are common to the Class

including, inter alia: (i) whether the Individual Defendants have breached their fiduciary duties

to plaintiff and the Class by agreeing to an acquisition transaction at a price that is inadequate

and is not the fair value that could be obtained under the circumstances; (ii) whether Platinum

aided and abetted the Individual Defendants’ breaches of fiduciary duty; and (iii) whether the

                                                   10
Class is entitled to injunctive relief and/or damages as a result of the wrongful conduct

committed by Defendants;

                (c)    Plaintiff is committed to prosecuting this action and has retained

competent counsel experienced in litigation of this nature. The claims of Plaintiff are typical of

the claims of the other members of the Class and Plaintiff has the same interests as the other

members of the Class. Accordingly, Plaintiff is an adequate representative of the Class and will

fairly and adequately protect the interests of the Class;

                (d)    The prosecution of separate actions by individual members of the Class

would create the risk of inconsistent or varying adjudications with respect to individual members

of the Class which would establish incompatible standards of conduct for Defendants, or

adjudications with respect to individual members of the Class which would, as a practical matter,

be dispositive of the interests of the other members not parties to the adjudications or

substantially impair or impede their ability to protect their interests; and

                (e)    Defendants have acted, or refused to act, on grounds generally applicable

to, and causing injury to, the Class and, therefore, preliminary and final injunctive relief on

behalf of the Class as a whole is appropriate.

                                          FIRST COUNT

                 Breach of Fiduciary Duty against the Individual Defendants

          45.   Plaintiff incorporates each and every allegation set forth above as if fully set forth

herein.

          46.   As alleged herein, Defendants have initiated a process to sell American that

undervalues the Company. Indeed, the stock price has risen over 60% since June 2010 and in the

days leading up to the announcement, was trading above the deal price.               The Individual



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Defendants are privy to non-public information concerning the Company that the public stock

shareholders are not; thus, there exists a fiduciary duty to protect these shareholders and ensure

the cash out process entails both fair dealing and a fair price. Defendants have failed to

sufficiently inform themselves of American’s value, or have disregarded the true value of the

Company.        Furthermore, the Individual Defendants have agreed to onerous deal protection

devices that discourage any alternate acquirer from coming forward in the face of the knowledge

that Platinum can block the purchase.

          47.    As such, unless the Individual Defendants’ conduct is enjoined by the Court, they

will continue to breach their fiduciary duties to Plaintiff and the other members of the Class, and

will further a process that inhibits the maximization of shareholder value and the disclosure of

material information.

          48.    Plaintiff and the members of the Class have no adequate remedy at law.

                                         SECOND COUNT

                   Aiding and Abetting the Board’s Breaches of Fiduciary Duty
                                        Against Platinum

          49.    Plaintiff incorporates each and every allegation set forth above as if fully set forth

herein.

          50.    Platinum knowingly assisted the Individual Defendants’ breaches of fiduciary

duty in connection with the Proposed Acquisition, which, without such aid, would not have

occurred. In connection with discussions regarding the Proposed Acquisition, Platinum secured

certain deal protection provisions which unfairly inhibit the advancement of alternative

proposals.      In addition, Platinum obtained sensitive non-public information concerning

American’s operations and thus had the advantage to acquire the Company at an unfair price.




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        51.     As a result of this conduct, Plaintiff and the other members of the Class have been

and will be damaged in that they have been and will be prevented from obtaining a fair price for

their shares.

        52.     Plaintiff and the members of the Class have no adequate remedy at law.

        WHEREFORE, Plaintiff demands injunctive relief, in his favor and in favor of the Class,

and against the Defendants, as follows:

         A.      Declaring that this action is properly maintainable as a class action, certifying

 Plaintiff as Class representative and certifying his counsel as class counsel;

         B.      Temporarily and permanently enjoining Defendants, their agents, counsel,

 employees and all persons acting in concert with them from consummating the Proposed

 Transaction;

         C.      To the extent the Proposed Transaction is consummated before entry of this

 Court’s judgment, rescinding it and setting it aside or awarding rescissory damages;

         D.      Awarding Plaintiff the costs and disbursements of this action, including

 reasonable attorneys’ and experts’ fees; and

         E.      Granting such other and further relief as this Court may deem just and proper.

Dated: October 22, 2010

                                            ROSENTHAL, MONHAIT & GODDESS, P.A.

                                            By:     /s/ Carmella P. Keener
OF COUNSEL:                                       Carmella P. Keener (Del. Bar No. 2810)
                                                  919 N. Market Street, Suite 1401
BRODSKY & SMITH, LLC                              P.O. Box 1070
Jason L. Brodsky                                  Wilmington, DE 19899
Marc L. Ackerman                                  (302) 656-4433
Two Bala Plaza, Suite 602
Bala Cynwyd, PA 19004                           Attorneys for Plaintiff
(610) 667-6200



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