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<< Rail News Home: Mechanical

4/25/2005    Settlement

Rail News: Mechanical

Greenbrier settles litigation, arranges stock buy-out with late co-founder's estate

Last week, The Greenbrier Cos. announced it reached a settlement with Alan James’ estate, which owns 26 percent of the company's stock. Co-founder, and former chairman, president and chief executive officer of Greenbrier, James died in January.

During the past few years, James lodged numerous complaints with Greenbrier’s board, alleging potential insider trading, criticizing the process for selecting outside board members and disapproving of procedural matters. He also filed a lawsuit to stop Greenbrier from adopting a "poison pill," a corporate mechanism designed to prevent hostile takeovers.

Under the settlement, estate managers agreed to dismiss all litigation and release all claims against the company. Greenbrier officials agreed to sell 4.5 million shares of common stock and use proceeds to purchase from the estate 1.5 million shares at net offering price and 1.6 million shares at 90 percent of net offering price. The company also will purchase 1.5 million shares from current President and CEO William Furman. After the stock sale, Furman will be Greenbrier’s largest stockholder.

“The company is now able to focus its attention exclusively on its business, remove the significant costs of litigation and distraction associated with the issues raised by our former chairman, and be positioned for future growth,” said Furman in a prepared statement.

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