The federal court that last month issued a temporary restraining order against the merger of Hastings Entertainment with two companies owned by Joel Weinshanker, president and owner of National Entertainment Collectibles Association, has extended the temporary restraining order until June 26, Hastings announced yesterday.
At a hearing on June 12, the judge did not rule on any issues in the case and is allowing Hastings to send a proxy statement to shareholders and solicit proxies for the merger.
The order came in a lawsuit by Hastings shareholders who, as the company has put it, "are alleging, among other things, that the merger contemplated in the Merger Agreement provides for insufficient consideration to be paid to Hastings' shareholders in exchange for their shares of Hastings' common stock, that the officers and directors of Hastings breached their respective fiduciary duties in the course of negotiating and approving the Merger Agreement and that the other defendants aided and abetted such breach of fiduciary duties." This was apparently one of many lawsuits that were filed in the weeks after the merger was announced.
Under the merger plan, announced in March, Hastings shareholders will receive $3 per share and the company will merge with Draw Another Circle and become a wholly owned subsidiary of Hendrix Acquisition Corp., both of which are wholly owned by Joel Weinshanker. National Entertainment Collectibles Association is a major supplier to Hastings of movie, book and video game merchandise and collectibles and already owns 12% of Hastings shares.
