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Greenbrier chairman files suit to prevent company from adopting 'poison pill'


Yesterday, The Greenbrier Cos. Chairman Alan James announced he filed a lawsuit in Delaware's Court of Chancery to stop the company from adopting a "poison pill," a corporate mechanism designed to prevent hostile takeovers.

James claims the other board members breached their duties to shareholders by approving the poison pill on July 13 and seeks to have the company drop the measure, which took effect yesterday.

"This poison pill could prevent shareholders from maximizing the value of their shares, [and] entrenches current management and board members, contrary to improved corporate governance practices that have evolved following the Enron scandal," said James in a prepared statement.

James claims he told other board members that a poison pill isn't needed because Greenbrier isn't threatened by a hostile takeover.

"I recommended that if a poison pill were ever to become warranted, all shareholders should be allowed to vote on it and that I would vote my shares with the majority of public shareholders," he said, adding that he was the only board member who voted against adoption of a poison pill.

A Portland, Ore., businessman who previously served as Greenbrier's president and chief executive officer, James has served as chairman since 1985. He owns about 29 percent of Greenbrier's outstanding common stock.