Apollo Tyres Ltd. lost a bid for dismissal of Cooper Tire & Rubber Co.’s lawsuit seeking to force a $2.5 billion takeover, paving the way for a trial next month.
Apollo asked a judge in Delaware last week to throw out Cooper’s case, contending the Ohio-based company hasn’t lived up to its part of the bargain and the $35-a-share deal shouldn’t go through.
There’s a need “to develop the facts,” and lawyers should “prepare for trial” if they can’t settle the case, Delaware Chancery Court Judge Sam Glasscock III said today in a telephone hearing.
Cooper has been “unable for a matter of months to access basic financial material about a significant portion of its business,” Raymond DiCamillo, an Apollo lawyer, said in an Oct. 18 letter to the judge.
John Hardiman, another of Apollo’s lawyers, told Glasscock today that the buyout was to be completed “if, and only if, all conditions have been satisfied.”
An attorney for Cooper, Stephen Norman, said in a letter to the judge, “This court has already twice rejected the very same legal argument.”
Robert Faxon, also a lawyer for Cooper, told Glasscock today that problems with the United Steelworkers union in the U.S. and a strike at a Chinese partner’s tire operations, were risks “that the parties contemplated” and now, Apollo has “switched to litigation mode” to back out.
Cooper, based in Findlay, Ohio, said June 12 that it would be bought by Apollo. Cooper sued Apollo to enforce the buyout after the Gurgaon, India-based company failed to close the deal by an Oct. 4 deadline.
Cooper contends that Apollo agreed to use its “reasonable best efforts” to complete the transaction or pay a $112.5 million “reverse breakup fee” to walk away.
Apollo based its dismissal request on Cooper’s contention that it “has no control over” its Chinese joint venture partner Chengshan Group Co. and cannot get its books and records. The partnership also is refusing to produce any Cooper brand tires, according to testimony.
The case is Cooper Tire & Rubber Co. v. Apollo Holdings Pvt Ltd., CA8980, Delaware Chancery Court (Wilmington).