COOPER IN COURT
Apollo: Tire company did not honor agreement
Lawyer tells judge firm’s obligations snagged deal
7/10/2014GEORGETOWN, Del. — Cooper Tire & Rubber Co.’s failure to honor terms of a buyout agreement doomed a $2.5 billion sale of the U.S. tiremaker to its Indian competitor Apollo Tyres Ltd., a lawyer for Apollo said in court Wednesday.
Labor strife in the United States and opposition to the purchase by Cooper’s Chinese joint-venture partner caused Findlay-based Cooper to run afoul of the sale contract and left it unable to close the deal, John Hardiman, the lawyer, told a judge.
Apollo urged Delaware Chancery Judge Sam Glasscock to make a final ruling on Cooper’s missteps so the Indian firm can ask an appellate court to absolve it of responsibility for the deal’s demise. Cooper claims it’s entitled to more than $100 million in damages over Apollo’s refusal to make the sale final.
Since the U.S. tiremaker wasn’t “in a position to close the deal, Cooper can’t get damages,” Mr. Hardiman said at a court hearing in Georgetown.
Cooper said in December it was dropping plans to sell itself to Apollo after financing for the transaction fell through. Apollo originally offered to buy the U.S. tiremaker for $35 a share. It cut its offer after learning of problems within Cooper’s Chinese partner, Cooper Chengshan (Shandong) Tire Co.
Officials at the Chinese joint venture who opposed the deal denied Cooper executives access to tire-making facilities in that country and refused to provide financial records demanded by Apollo as part of the buyout. Apollo officials also argued that Cooper’s mishandling of labor negotiations with the United Steelworker’s union left it unable to satisfy the buyout agreement’s terms.
In November, Judge Glasscock rejected Cooper’s claim that Apollo breached the pact by dragging its feet in negotiating a contract with steelworkers that would clear the way for the deal. Judge Glasscock allowed Cooper to appeal his ruling on that single issue to the Delaware Supreme Court, which declined to hear it.