ÿWPCõ €7v6»ùÄÍ&™¹ï&“fת5é9þ#ÃÆâ”#.çþÅYc$ÓËeÿŒÝ‰?,´e &ôâ‚'–ÒÇ÷åë)h1•*ÚZ¯¿@µ\²pÍÌ…E®ñâ^a2ˆŽlsÌB²½`‰0¶÷{3'µÇH89µâç7€»€ný˜2'÷ îOa™CC}#Ï 5ÆŽ8[µscO´–úqAθåÀ·s´íW­ªÉ­÷_iásJå[²¨E\dØPtu_#Yà†_ Ð{M]g͉öG*ålr=r(fМ”¤­áIRá"½ ºßÍÎRXyóç7ŸŸÉ‚‘öï4ûo¢B2ö*Ãq*Ã’¤OÅ;Ç3½-ÆBbÿ¥ùgX覱鄦Îbåý™Î?änp\W²`÷];_ií—!๻¤§>'ÓåK¤|BOwÚZ†@x‘z¥’Hl¸²?«­'ó"+Õ—]‹þMu g[„ø|ÈJšÐ ‡Õ0#Z±:¼•ÞóËܹã+ÿ«­}ŽQßMŠ2güm•øKžûŸ‹úæÖÂíS¤åÚtç“63kï8Cñ–è PèYªÉ’ù6k6º”XëáÙ6è<+?˜Û[#ÁúUN» % 0( ^ 7 wC 4G [ j ml Nƒ …  (£ 0lË 0D7 «{ { { { ²&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& BؘHP CLJ 5550DN PCL 6ÈÈÈÈÈÈÈÈ0(ÈhH  Z‹6Times New Roman RegularX($¡¡èvŽ4â šX†3ê:i¢Ø+003|xÿU‹ÿÀÀÀ  Ñ ° Ñ Ý ƒüÝ$Ýà  àòòÚ  Ú2Ú  ÚóóÝ  ÝÔ_Ô€€Plaintiff€has€suggested€that€he€may€amend€his€complaint€to€include€allegations€that€theÐ ° Ðoriginal€$20,000,000€break„up€fee,€which€was€a€part€of€the€December€19,€2005€acquisitionÐ œì Ðagreement,€constituted€an€unlawful€defense€mechanism€under€theories€outlined€in€òòRevlon,€Inc.€v.Ð ˆØ ÐÔ_ÔMcAndrewsÔ_Ô€and€Forbes€Holdings,€Inc.óó,€506€A.2d€173€(Del.€Super.€1986),€thereby€eliminating€theÐ tÄ Ðpossibility€of€an€effective€bidding€contest€after€the€announcement€of€the€agreement€between€Ô_ÔTCTÔ_ÔÐ `° Ðand€Magazine.€€Such€allegations€are€not€before€the€Court€on€the€pending€motions.((3üÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó ¡Ý ƒüÝ$Ýà  àòòÚ  Ú1Ú  ÚóóÝ  ÝÔ_Ô€€The€Court€has€not€yet€been€presented€with€a€motion€for€class€certification.€ ¨Ý ƒüÝ$Ýà  àòòÚ  Ú3Ú  ÚóóÝ  ÝÔ_Ô€€Plaintiff€has€not,€at€this€point,€pursued€its€request€for€a€preliminary€injunction. dÝ ƒ!ÝÝ  ÝÔ_ÔÑ€ OaÑÑ8€5ÜXXdìdÈ8ÑLEE€FOSTERà0 ¸ àà  àà h àà À à*à0¸ (#¸ (#àIN€THEа(#(# ÐÌà  àPlaintiffà ¸ àà  àà h àà À à*à0  àCIRCUIT€COURTЈØ(#(# ÐÌv.€€€€€€€€€€€€€€€€à0 ` àà0¸ ` (#` (#àà  àà h àà À à*à0¸ (#¸ (#àFORÐ`°(#(# ÐÌTHE€TOWN€AND€COUNTRY€TRUST,à À à*à0  àBALTIMORE€CITYÐ8 ˆ(#(# Ðet€al.Ð $ t Ðà  àà ` àà ¸ àà  àà h àà À à*à0  àPart€20Ð `(#(# Ðà  àDefendantsÐ ü L  Ðà  àà ` àà ¸ àà  àà h àà À à*à0  àCase€No.:€24„C„06„001442€€€€€€€€€€€€€€€€€€€€€€€€€Ðè 8 (#(# Ðà  àà ` àà ¸ àà  àÌà  àà ` àà ¸ àà  àà h àà À à*Ð À  Ð******************************************************************************Ð ¬ü  Ðò òòòó óóóà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#à€€ò òòòMEMORANDUM€OPINIONóóó óИè (#(# ÐÌÓÓà  àI.à0 ` àBackgroundÐtÄ` (#` (# Ðà  àà ` àPlaintiff,€Lee€Foster,€seeks€to€represent€a€class׃×Ý ƒ#ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€of€shareholders€of€the€commonÐ Lœ Ðstock€of€Town€and€Country€Trust€(ð ðÔ_ÔTCTÔ_Ôðð)€to€enjoin€the€proposed€acquisition€of€Ô_ÔTCTÔ_Ô€byÐ $t ÐMagazine€Acquisition€LP€(ð ðMagazineðð),€a€joint€venture€formed€by€Morgan€Stanley€Real€EstateÐ üL Ðand€Ô_ÔOnexÔ_Ô€Real€Estate,€as€announced€on€December€19,€2005.€€The€terms€of€the€originalÐ Ô$ Ðacquisition€agreement€called€for€a€cash€out€of€public€stockholders€at€$33.90€per€share,€whichÐ ¬ü Ðplaintiff€challenges€as€an€undervaluation€of€his€equity€interests€in€Ô_ÔTCTÔ_Ô.€€Pending€before€the€CourtÐ „Ô Ðat€the€time€of€the€February€21,€2006€hearing€were€plaintiffððs€motion€for€expedited€proceedings,€toÐ \ ¬ Ðaccelerate€discovery€for€the€purposes€of€seeking€a€preliminary€injunction€against€the€scheduledÐ 4"„  ÐMarch€9,€2006€shareholder€meeting€to€ratify€the€acquisition€agreement€and€defendantsðð€motion€toÐ  $\" Ðdismiss€or,€in€the€alternative,€for€summary€judgment.€€By€Order€dated€February€21,€2006,€theÐ ä%4!$ ÐCourt€denied€plaintiffððs€motion€for€expedited€proceedings€and€granted€defendantsðð€motion€toÐ ¼' #& Ðdismiss€the€complaint€for€failure€to€state€a€claim€upon€which€relief€may€be€granted,€with€leave€toÐ ”)ä$( ÐÑ OaÑâ  âѰ°Ñâ  âÑ  ÑÔ_Ôamend€within€thirty€days.Ð ° Ðà  àII.à0 ` àDiscussionЈØ` (#` (# Ðà  àà ` àThe€Court€files€this€Memorandum€Opinion€to€set€forth€briefly€its€reasons€inÐ `° Ðsupport€of€its€rulings€on€the€pending€motions.Ð 8 ˆ Ðà  àà ` àThe€gravamen€of€plaintiffððs€argument׃×Ý ƒ#ÃÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×€is€that€the€defendants€violated€theirÐ  ` Ðfiduciary€duties€to€TCT€by€entering€into€an€acquisition€agreement€with€Magazine€at€$33.90€perÐ è 8  Ðshare€before€adequately€testing€the€market€to€determine€an€appropriate€price€at€which€to€begin€aÐ À  Ðformalized€bidding€process.€€Because€the€acquisition€agreement€with€Magazine€permitted€TCTððsÐ ˜è  ÐBoard€to€consider€unsolicited€proposals€from€other€entities€after€December€19,€2005,€a€biddingÐ pÀ Ðcontest€did€ensue.€€As€of€February€16,€2006€Magazine€had€increased€its€offer€to€$40.20€a€shareÐ H˜ Ðand€the€other€principal€bidder,€Oriole€Partnership€LLC,€declined€to€increase€its€earlier€offer€fromÐ  p Ð$40.15€a€share,€thereby€appearing€to€end€the€bidding.Ð øH Ðà  àà ` àPlaintiffððs€counsel€set€forth€four€bases€in€support€of€its€argument€that€TCT€enteredÐ Ð  Ðinto€the€December€19,€2005€merger€agreement€with€Magazine€prematurely.€€Plaintiffððs€firstÐ ¨ø Ðobjection€is€that€Lazard€Frres€&€Co.€LLC€(ð ðLazardðð),€an€investment€banking€firm€retained€onÐ €Ð ÐOctober€21,€2005€by€TCT€to€serve€as€financial€adviser€with€respect€to€a€sale€or€merger,€was€notÐ X ¨ Ðinstructed€to€canvas€the€marketplace€to€obtain€a€fair€per„share€selling€price€prior€to€December€19,Ð 0"€  Ð2005.€€Plaintiff€candidly€admits€that,€standing€alone,€there€is€no€legal€authority€to€require€suchÐ $X" Ðactivity.€€Secondly,€plaintiff€complains€that€TCT€did€not€reach€out€to€third€parties€to€obtainÐ ° Ðð ðfeelersðð€in€the€marketplace,€a€market„check€which€it€contends€is€required€even€under€MarylandÐ ˆØ Ðcorporate€principles€as€enunciated€in€òòJasinover€v.€The€Rouse€Co.,€et€alóó,€2004€Wl€3135516€(Md.Ð `° ÐCir.€Ct.).€€Thirdly,€because€plaintiff€contends€there€is€no€valid€business€purpose€for€failing€toÐ 8 ˆ Ðperform€such€a€pre„agreement€market„check,€the€directorsðð€decision€to€adopt€the€acquisitionÐ  ` Ðagreement€on€December€19,€2005€should€not€be€afforded€the€protection€of€the€business€judgmentÐ è 8  Ðrule.€€Md.€Code€Ann.,€Corps.€&€Assððns€Art.,€ðð€2„405.1.€€Finally,€plaintiff€argues€that€TCT€has€notÐ À  Ðengaged€in€a€process€that€permitted€an€appropriate€post„agreement€market„check,€such€as€thatÐ ˜è  Ðapproved€in€òòJasinover€v.€The€Rouse€Co.,€et€al.óó,€òòsupraóó.€€Ð pÀ Ðà  àà ` àThis€Court€disagrees€with€plaintiffððs€contention€that€the€defendants€have€violatedÐ H˜ Ðtheir€fiduciary€duties€in€adopting€the€merger€agreement€of€December€19,€2005,€therebyÐ  p Ðestablishing€the€ð ðfloorðð€for€all€further€price„per„share€bidding.€€The€directly€relevant€commentaryÐ øH Ðfrom€James€Hanks€is€quoted€by€Judge€Sweeney€in€his€decision€in€òòJasinoveróó,€to€the€effect€that€theÐ Ð  ÐBoard€is€entitled€to€the€presumption€of€the€business€judgment€rule€under€Maryland€law,€so€longÐ ¨ø Ðas€its€actions€are€reasonable€and€that€an€acquisition€agreement€is€entered€into€after€arms„lengthÐ €Ð Ðnegotiations,€even€if€no€pre„agreement€ð ðshoppingðð€is€undertaken.€€In€a€change€of€control€situationÐ X ¨ Ðsuch€as€that€present€here,€ð ðsome€demonstrable€market„checkðð€is€most€likely€required.€€Hanks,Ð 0"€  ÐMaryland€Corporation€Law€ðð€6.6€(b)€(2003€Suppl.).€€€The€negotiations€leading€up€to€theÐ $X" Ðacquisition€agreement€of€December€19,€2005€with€Magazine€are€detailed€in€TCTððs€proxyÐ à%0!$ Ðmaterials€filed€with€the€SEC.€€As€Judge€Sweeney€stated€in€òòJasinoveróó,€ð ðMaryland€does€not€requireÐ ¸'#& Ðan€auction€when€the€decision€is€made€to€sell€a€corporation.€€There€is€no€requirement€that€theÐ )à$( ÐBoard€fully€shop€the€company€to€multiple€bidders€and€have€a€so„called€ððlevel€playing€fieldðð€for€allÐ h+¸&* Ðbidders.€€There€will€be€a€need€to€market„check€or€test€the€Boardððs€decision,€but€the€Board€is€freeÐ ° Ðto€lock€up€an€attractive€deal€and€use€post€agreement€methods€to€do€so.ðð€€Even€under€the€enhancedÐ ˆØ Ðscrutiny€employed€by€the€Delaware€courts,€the€controlling€authority€is€that€ð ða€Board€need€not€beÐ `° Ðpassive€even€in€an€auction€setting.€€It€may€never€appropriately€favor€one€buyer€over€another€for€aÐ 8 ˆ Ðselfish€or€inappropriate€reason,€such€as€occurred€in€òòRevlonóó,€but€it€may€favor€one€over€another€ifÐ  ` Ðin€good€faith€and€advisedly€it€believes€shareholder€interests€would€be€thereby€advanced.ðð€FortÐ è 8  ÐHoward€Corporation€Shareholders€Litigation,€1988€Wl€83147€(Del.€Ch.).€€There€is€no€question€inÐ À  Ðthis€case€that€the€bidding€did€not€stop€when€TCT€entered€into€the€acquisition€agreement€withÐ ˜è  ÐMagazine€on€December€19,€2005.€€The€price„per„share€offerings€have€risen€substantially€as€aÐ pÀ Ðresult€of€the€bidding€which€ensued.€€Accordingly,€plaintiff€has€failed€to€state€a€claim€underÐ H˜ ÐMaryland€law€and€his€complaint€must€be€dismissed.€€If€plaintiff€chooses€to€take€advantage€of€theÐ  p ÐCourtððs€leave€to€amend€within€the€appropriate€time€frame€and€raises€new€allegations€concerningÐ øH Ðthe€final€acquisition€agreement,€determination€of€any€issues€related€thereto€will€have€to€wait€forÐ Ð  Ðanother€day.€€In€the€Courtððs€judgment,€monetary€damages€will€adequately€compensate€theÐ ¨ø Ðplaintiff€for€any€such€claim,€eliminating€the€need€for€expedited€discovery.׃×Ý ƒ#ÃÝòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×Ð €Ð ÐÌÌÓÓà  àà ` àà ¸ àà  àà h àà À àà  àòò€€€€€€€€€€€€€€€€€/s/€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÐ $X" Ðà  àà ` àà ¸ àà  àà h àà À àà  àALBERT€J.€MATRICCIANI,€JR.Ð ô$D # Ðà  àà ` àà ¸ àà  àà h àà À àà  àJudgeÐ à%0!$ Ðà  àà ` àà ¸ àà  àà h àà À àà  àFebruary€24,€2006Ð Ì&"% ÐÌÌÐ )à$( Ðcc:à0  àJohn€B.€Isbister,€Esquireа(#(# Ðà  àDaniel€S.€Katz,€EsquireÐ œì ÐÌà  àLee€D.€Rudy,€EsquireÐ tÄ Ðà  àSandra€G.€Smith,€EsquireÐ `° ÐÌà  àG.€Stewart€Webb,€Esquire