Delaware Chancery Court Rules in Favor of OTK Associates
Court Orders Morgans Hotel Group To Maintain March 22, 2013 Record Date
Company Prohibited From Pursuing Recapitalization Transaction With Yucaipa
NEW YORK -- May 14, 2013
OTK Associates LLC, the largest stockholder of Morgans Hotel Group Co.
(Nasdaq: MHGC) with 13.9% of the outstanding common stock of the company,
today announced that Vice Chancellor J. Travis Laster of the Delaware Court of
Chancery has issued an order granting a preliminary injunction prohibiting
Morgans Hotel Group’s board from taking any steps to postpone the Annual
Meeting of Stockholders scheduled for May 15, 2013, or to change the record
date of March 22, 2013, for the annual meeting. The Court also ordered that
the company shall proceed with its annual meeting as scheduled on May 15,
2013, and may convene and adjourn the meeting for not more than 30 days.
In addition, the Court ordered that the company is prohibited from taking any
steps to consummate the transactions contemplated by the Exchange Agreement,
dated as of March 30, 2013, between the company and The Yucaipa Companies
until the earlier of (i) a trial on the merits or (ii) a decision by the board
of directors with respect to the Yucaipa Agreements made at a properly noticed
meeting after due deliberations and, to the extent the board of directors
determines to proceed with the Yucaipa Agreements, after receiving a favorable
recommendation from the Special Transaction Committee.
OTK commented that it is pleased with the Court's decision as it provides
stockholders of record on the original date set by the company their right to
elect directors that will act in their best interests. It also allows for a
trial on the recapitalization plan which OTK believes is not in the best
interests of stockholders.
OTK looks forward to communicating with stockholders regarding the strengths
of its director nominees. Members of OTK’s slate possess the specific industry
experience, financial sophistication and operating relationships to
immediately begin repositioning the company.
STOCKHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS
RELATED TO SOLICITATION OF PROXIES BY OTK ASSOCIATES, LLC AND ITS AFFILIATES
FROM THE STOCKHOLDERS OF MORGANS HOTEL GROUP CO. FOR USE AT THE 2013 ANNUAL
MEETING OF MORGANS HOTEL GROUP CO. WHEN THEY ARE AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. WHEN COMPLETED, SUCH MATERIALS WILL, ALONG WITH
OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND
EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV OR BY CONTACTING THE
PARTICIPANTS' PROXY SOLICITOR, OKAPI PARTNERS, TOLL FREE AT (877) 869-0171, OR
BY EMAIL TO INFO@OKAPIPARTNERS.COM.
INFORMATION RELATING TO THE POTENTIAL PARTICIPANTS IN A POTENTIAL PROXY
SOLICITATION IS CONTAINED IN EXHIBIT 1 TO THE SCHEDULE 14A FILED PURSUANT TO
RULE 14A-12 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY OTK
ASSOCIATES, LLC ON MAY 14, 2013, AS IT MAY BE AMENDED FROM TIME TO TIME. THE
SCHEDULE 14A AND ANY AMENDMENTS ARE AVAILABLE AT NO CHARGE ON THE SECURITIES
AND EXCHANGE COMMISSION’S WEBSITE AT HTTP://WWW.SEC.GOV.
Okapi Partners LLC
Bruce Goldfarb/Patrick McHugh/Charles Garske
Sard Verbinnen & Co
Dan Gagnier/Nathaniel Garnick
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