Opinion ID: 3159358
Heading Depth: 2
Heading Rank: 2

Heading: 2007-2008 Sale Process

Text: Antioch’s sales began declining in 2004, and continued to decline over the next several years. The deterioration in the business would later be attributed to changes in the market—such as the growth of digital photography, competition from mass retailers, and waning interest in scrapbooking—as well as insufficient capital to meet those challenges. The company’s workforce shrank substantially between 2004 and 2006, and the associated stock repurchase obligations required further borrowing and the issuance of additional subordinated notes to former employees. In early 2007, the Board concluded that the company’s financial situation was unsustainable and engaged financial advisors to market the company for sale or recapitalization. Plaintiff alleged that defendants undermined those efforts in several ways, including by involving a second firm in the process to pursue options in the Morgan family’s interests. In May 2008, Antioch received the J.H. Whitney Company’s Letter of Intent offering to purchase Antioch’s assets for $54 million. Whitney had done some due diligence, but its Letter of Intent (LOI) was subject to further due diligence and the negotiation of an asset purchase agreement. When Antioch’s financial advisors recommended going forward, Morgan, Moran, and the ESOP 2 Plaintiff contends that the district court erred by refusing to extend or toll the limitations period for this claim on the grounds of adverse domination, equitable tolling, or equitable estoppel. As noted, we reserve our review of that decision until after the Supreme Court of Ohio answers or declines to answer the separately certified question of state law. Case No. 14-3790, The Antioch Company Litigation Trust v. Lee Morgan, et al. Trustee allegedly ousted several board members in order to scuttle the deal and the LOI was allowed to lapse. When no other buyer or lender was found, Antioch’s secured lenders forced the company to file a prepackaged Chapter 11 bankruptcy petition on November 13, 2008.