Hearing in Genesco Buyout Delayed
Nashville, Tenn., The first court hearing in a lawsuit seeking to force The Finish Line Inc. to complete its $1.5 billion buyout of hat and shoe retailer Genesco Inc. was delayed Monday over whether investment bank UBS AG will agree to try the case in Nashville, Tenn.
UBS committed to financing most of Indianapolis-based retailer Finish Line’s $54.50-per-share deal for Genesco in June, but later announced it had stopped processing the closing documents because of concerns over Genesco’s financial performance since the deal was struck. UBS’ agreement with Finish Line limited all legal proceedings to New York.
Finish Line’s lawyers were granted a two-day delay so they could continue discussions with UBS about whether the Swiss bank will agree to waive that provision of its commitment letter.
Nashville, Tenn.-based Genesco’s chairman and CEO Hal N. Pennington has accused UBS of trying to back out of the deal because of upheaval in the credit market and not because of Genesco’s financial performance.
UBS earlier this month announced it would write down the value of assets by $3.4 billion because of losses linked to the subprime mortgage crisis, and said it would post a pretax loss of up to $690 million in the period ended Sept. 30.
Genesco, which is suing to force Finish Line to complete the deal, has asked the court for an accelerated trial schedule because UBS’ financing commitment is slated to expire on Dec. 31.
Finish Line also asked for more time to review financial documents Genesco had resisted turning over until Friday.