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Old 07-30-2012, 02:05 PM   #181
Chris Mason
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Katherine Derbyshire View Post
On the other hand, plenty of businesses find their unique culture to be an important asset and go out of their way to preserve it. While a new equity partner certainly *could* influence the corporate culture, it is not a given that they *would.*

There have also been plenty of debates on this very board about various actions taken by HQ. Especially as Crossfit grows and the number of affiliate owners with personal relationships with HQ shrinks, there's something to be said for clarifying the rights and responsibilities of both sides.

Katherine
So what is YOUR position?

As to the discussions etc., yes change is inevitable with growth, but adding a private equity firm at 50% ownership certainly INCREASES the chances of dramatic change.
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Old 07-30-2012, 02:08 PM   #182
Bryan Kemper
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Re: Stop Anthos from Taking over CrossFit

Changes to the affiliate structure is just one of the possible ways to not "leave money on the table." What if the mainsite WOD or the Discussion board becomes a subscription only service as a result? I mean there has to be hoards of people that would pay $19.95 a month for this service.....

I could not really see this happening, but it would be a source of untapped revenue.
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Old 07-30-2012, 02:10 PM   #183
Michael Petersen
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Jeff Reising View Post
Devin,

It's not a great point. There is something called the business judgment rule. A judge will not tell Greg Glassman how to operate his business. (Forced dissolution by an equal partner is another story). I'm afraid I am a lawyer with some background in corporate law. Don't believe anything you read in these posts. It is 95% uniformed speculation based on ignorance of the law and the particular facts of this case. Entertaining nonetheless, though.
Even when a corporation faces a hostile takeover, the business judgment rule may not insulate its directors from liability. In Revlon v. MacAndrews & Forbes Holdings, 506 A.2d 173 (Del. 1985), the company attempting a takeover sought a preliminary injunction to prevent the corporation that was the target of the takeover from granting a lockup option, which gives a friendly third party the right to purchase part of the target company to help thwart a takeover. The Delaware Supreme Court held that the directors failed to fulfill their duty to preserve the company by not maximizing the sale value of the company for the benefit of its shareholders. According to the court, by instituting the lockup option and halting the bidding, the directors allowed "considerations other than the maximization of shareholder profits to affect their judgment" and thus acted to the detriment of the shareholders. Once the directors determined to sell the corporation, the court held, their role changed from that of "defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders at the sale of the company." As a result, the court held that the directors were not entitled to the protection of the business judgment rule.

Courts have further held that the business judgment rule will cover the actions of directors only when the directors are disinterested and independent with respect to the action that is at issue. A director is independent when she or he is "in a position to base [her or his] decision on the merits of the issue rather than being governed by extraneous considerations or influences"; conversely, a director is considered to be interested if she or he appears to be on both sides of a transaction or expects to derive personal financial benefit from it, as opposed to a benefit to be realized by the corporation or all shareholders generally (Aronson v. Lewis, 473 A.2d 805 [Del. 1984]). Thus, if one director stands to receive a substantial financial benefit from the issuance of stock nonetheless designed to counteract a takeover threat, the business judgment rule may not apply to the board of directors' actions. Such allegations of bias, lack of independence, or disinterest must be supported by tangible evidence.


In the last few months shareholders of Duke Energy, Johnson and Johnson and JP Morgan Chase have all sued either the CEO or the Board for loss of value to the stock. Google "shareholders sue CEO" and you will get a ton of cases from the biggest corporations in the world.

Sorry if I was painting too broad a stroke with my simplistic "uniformed" point...but the business judgement rule is far from a "get out of jail free" card. I didn't even touch on the fact that if Anthos owned half the company, they would get a say on the compensation that all officers currently receive. Can we just agree that having a Private Equity firm with an ownership position in CrossFit Inc would make Glassman's life more complicated than it currently is?
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Old 07-30-2012, 02:15 PM   #184
Chris Mason
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Katherine Derbyshire View Post
If I had to guess, I would say that what we're seeing is a very public negotiation over the terms of the Glassman asset division. The Anthos Capital offer represents a bid that the other side is unwilling or unable to match, and so they are seeking to undermine the proposed sale through other means.

Katherine
I would say bad guess (that part about the bid - I agree with the 1st part). 50% of CrossFit is easily worth $20 million. Glassman could easily get funding for such a buyout. His wife clearly does NOT want to sell any percentage of her ownership to him. It's called being vindictive. Happens a lot in divorce...

Now, as you said in an earlier post, we don't have much, if any of the facts, but I would bet my bottom dollar based upon what is out there that what I said above has some degree of truth (about Mrs. Glassman not wanting to sell to him).
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Old 07-30-2012, 02:19 PM   #185
Justin McCallon
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Re: Stop Anthos from Taking over CrossFit

I would assume thst Joey and all the other attorneys on this board realize there are exceptions to the business judgment rule. We have all seen several examples and can seperate them into the different groups ofbexceptions. But, in this instance, it is very unlikely going to be a recourse for Anthos or for Glassman. None of thr exceptions will apply. I also doubt that Anthos would want to drain CF and VC resources by fighting a very uphill legal battle that will result in bad blood from Glassman, who is much bigger than the CF name without him.

And again, Anthos can't disagree much with Glassman. Gridlock resulting in dissolution kills them.
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Old 07-30-2012, 02:22 PM   #186
Justin McCallon
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Chris Mason View Post
I would say bad guess (that part about the bid - I agree with the 1st part). 50% of CrossFit is easily worth $20 million. Glassman could easily get funding for such a buyout. His wife clearly does NOT want to sell any percentage of her ownership to him. It's called being vindictive. Happens a lot in divorce...

Now, as you said in an earlier post, we don't have much, if any of the facts, but I would bet my bottom dollar based upon what is out there that what I said above has some degree of truth (about Mrs. Glassman not wanting to sell to him).
It would be interesting to hear from Ms. Glassman, who is apparently following this thread. Are you willing to sell for the same price to Greg or to to the affilliates?
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Old 07-30-2012, 02:25 PM   #187
Craig Massey
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Justin McCallon View Post
It would be interesting to hear from Ms. Glassman, who is apparently following this thread. Are you willing to sell for the same price to Greg or to to the affilliates?
Unless the position has changed, it's been stated several times that an offer better than Anthos' was made and has been rejected.
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Old 07-30-2012, 02:26 PM   #188
Jamie Gowens
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Chris Mason View Post
I would say bad guess (that part about the bid - I agree with the 1st part). 50% of CrossFit is easily worth $20 million. Glassman could easily get funding for such a buyout. His wife clearly does NOT want to sell any percentage of her ownership to him. It's called being vindictive. Happens a lot in divorce...

Now, as you said in an earlier post, we don't have much, if any of the facts, but I would bet my bottom dollar based upon what is out there that what I said above has some degree of truth (about Mrs. Glassman not wanting to sell to him).
She doesn't want to sell to him. Her motives are up for speculation. So...what if on the other side - you have a business owner who's had a direct involvement in the development and growth of the company from the time it was a wee small squib making the decision to leave the company, after decades of emotional, physical, mental, and educational investment. Her vision for what would be best for the business doesn't coincide with the idea of selling him her half. She does not see that as the best decision for what she's helped build. BOTH Glassmans had a direct hand through the years building this. To say Lauren didn't have a hand would be ludicrous.
Just because she wants to sell, why should she be required to sell to Greg?
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Old 07-30-2012, 02:29 PM   #189
Justin McCallon
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Craig Massey View Post
Unless the position has changed, it's been stated several times that an offer better than Anthos' was made and has been rejected.
Well, I would rather hear it from the source. I am guessing there were different terms (e.g., less cash up front).
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Old 07-30-2012, 02:31 PM   #190
Craig Massey
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Re: Stop Anthos from Taking over CrossFit

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Originally Posted by Justin McCallon View Post
Well, I would rather hear it from the source. I am guessing there were different terms (e.g., less cash up front).
Good luck with that.
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