Company Moves to Settle Cherokee Investors’ Suits
An investor group said it tentatively settled three class-action lawsuits brought by shareholders of Cherokee Group who had objected to the investors’ proposed $174-million acquisition of the company.
Cherokee, an apparel and shoe concern based in Sunland, agreed to be acquired for $14 a share in cash and securities by Green Acquisition Co., a company organized by an investor group that includes three top Cherokee executives and Deutschman & Co., a Los Angeles investment firm. Green currently owns just under half of Cherokee’s stock after completing a tender offer Oct. 12.
Among other things, the settlement calls for Green to pay interest on the purchase price to all Cherokee shareholders if the merger is not completed by mid-March, Green said in a filing with the Securities and Exchange Commission.
The interest charged would be equal to that on federal funds, which are overnight reserves banks lend one another. The interest would be paid until the merger is completed, and would be paid with the same bonds being issued as part of the $14-a-share purchase price, Green said.
The settlement is subject to court approval.