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Case 1:11-cv-01946-RJS

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James A. Hunter (JH-1910) HUNTER & KMIEC

JUDGE SULLIVAN

1

150 East 44th Street, No. 9A New York, New York 10017 Tel: (646) 666-0122

E-Mail:

hunter@hunterkmiec.com.

Attorneys for Plaintiff
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

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EMMIS COMMUNICATIONS

CORPORATION,
ECF CASE

Plaintiff,
v.

No.

ALDEN GLOBAL DISTRESSED OPPORTUNITIES FUND, LP; AGDOF SLP, LLC (f/k/a ALDEN GLOBAL DISTRESSED OPPORTUNITIES FUND GP, LLC); and RANDALL D. SMITH,

COMPLAINT FOR RECOVERY OF SHORT-SWING PROFITS UNDER 15 U.S.C. 78p(b)

Defendants.

Plaintiff Emmis Communications

Corporation, by its attorneys Hunter &

Kmiec, hereby complains of Defendants, averring as follows:

JURISDICTION AND VENUE This action arises under Section
Act of

16(b) of the

Securities

Exchange

1934,

as

amended

(the "Act"),

15 U.S.C.

78p(b).

Jurisdiction is conferred upon

this Court pursuant to Section 27 of the Act, 15 U.S.C.

78aa.

Case 1:11-cv-01946-RJS

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2. Act because
some or

Venue is

properly laid in this District pursuant to
are

Section 27 of the

all of the Defendants
some or

found in and transact business in this

District and because District.

all of the transactions described herein occurred in this

THE PARTIES

3.

Plaintiff Emmis Communications Indiana

Corporation (“Plaintiff”

or

the

“Company”)
Emmis

is

an

corporation whose principal place of business is

located at One

Plaza,

40 Monument 4.

Circle, Suite 700, Indianapolis, Indiana 46204.

Alden Global Distressed

Opportunities Fund,

LP

(“Alden LP”) is

a

Delaware limited partnership whose

principal place of business is

located at 885 Third

Avenue, New York, New York 10022.
5.

Defendant AGDOF SLP, LLC

(formerly known as
a

Alden Global

Distressed

Opportunities Fund GP, LLC) (“Alden LLC”) is principal place of business

Delaware limited liability

company whose

is located at 885 Third Avenue, New

York,

New York 10022. Alden LLC is the sole 6.

general partner of Alden LP. (“Smith” and, collectively with principal place
of

Defendant Randall D. Smith

Alden LP and Alden LLC, the

“Defendants”) is

a

natural person whose

business is located at 885 Third Avenue, New York, New York 10022. Smith is the

managing member of Alden LLC.

STATUTORY REQUISITES 7.

The violations of Section

16(b)

of the Act described herein involve

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non-exempt securities in non-exempt transactions engaged in by non-exempt persons
within the

meaning of the Act.
8. At all relevant

times, the Class A common stock of the Company 78l, and was listed for

was

registered pursuant to

Section 12 of the Act, 15 U.S.C. Stock Market LLC.

trading on The NASDAQ
9.

This action is
or

brought within two years

of the

occurrence

of the

violations described herein Section

within two years of the time when reports

required by

16(a) of the Act,

15 U.S.C.

78p(a), setting forth the substance of the
Securities and Exchange

transactions here Commission

complained of were first filed with the U.S.

(“SEC”).

FACTUAL ALLEGATIONS 10. At all relevant

times, Defendants

were

shareholders of the

Company.

Each Defendant beneficially owned in

excess

of 10% of the

outstanding

shares of the

Company’s
11.
In

Class A

common

stock. and April2010, the Defendants of the

February, March,

engaged in a
Class A

serious of transactions
common

resulting in the purchase and sale

Company’s

stock

as

described in paragraphs 12-22 below.
Defendants Enter into Four Cash-Settled Equity Swap Agreements

12.

Agreement #1:

On

February 25, 2010, Defendants

entered into

a

cash-settled

equity swap agreement with a third party referencing 9, 400
Class A
common

shares of the

Company’s

stock.

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13.

For purposes of Section 16 of the Act and the rules and regulations

of the SEC

thereunder, the Defendants’ entry into the agreement described in
was

paragraph

12 above

equivalent in all relevant respects to the non-exempt purchase by
Company’s
Class A
common

Defendants of 9, 400 shares of the

stock at the price of

$0.88 per share, such price being the contemporaneous market price of the Company’s
Class A
common

stock

on

the open market

on

February 25,

2010.
a

14.

Agreement #2:

On March

1, 2010, Defendants entered into

cash-settled

equity swap agreement with a third party referencing 83, 900
Class A
15.
common

shares of the

Company’s

stock.

For purposes of Section 16 of the Act and the rules and regulations

of the SEC

thereunder, the Defendants’ entry into the agreement described in
was

paragraph

14 above

equivalent in all relevant respects to the non-exempt purchase by
Company’s
Class A
common

Defendants of 83, 900 shares of the

stock at the price of

$0.90 per share, such price being the contemporaneous market price of the Company’s
Class A
common

stock

on

the open market

on

March 1, 2010.

16.

Agreement #3:

On March

1, 2010, Defendants entered into

a

cash-settled

equity swap agreement with a third party referencing 12, 857
Class A
17.
common

shares of the

Company’s

stock.

For purposes of Section 16 of the Act and the rules and regulations

of the SEC

thereunder, the Defendants’ entry into the agreement described in
was

paragraph

16 above

equivalent in all relevant respects to the non-exempt purchase by Company’s
Class A
common

Defendants of 12, 857 shares of the

stock at the price of

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$0.90 per share, such price being the contemporaneous market price of the Company’s
Class A
common

stock

on

the open market

on

March 1, 2010.

18.

Agreement #4:

On March

19, 2010, Defendants entered into

a

cash-settled

equity swap agreement with a third party referencing 200, 000
Class A
19.
common

shares of the

Company’s

stock.

For purposes of Section 16 of the Act and the rules and regulations

of the SEC

thereunder, the Defendants’ entry into the agreement described in
was

paragraph

18 above

equivalent in all relevant respects to the non-exempt purchase by
Company’s
Class A
common

Defendants of 200, 000 shares of the

stock at the price of

$1.00 per share, such price being the contemporaneous market price of the Company’s
Class A
common

stock

on

the open market The

on

March 19, 2010. summarizes the Section 16

20.

Summary:

following table

consequences of the transactions described in paragraphs 12-19 above:
Section 16 Treatment Purchase of Class A Common Stock
Number of Shares

Date of Transaction

Price per Share

February 25, 2010
March 12010

9,400

$0.88

Purchase of Class A 83900 Common Stock,

$0.90

March 12010

Purchase of Class A 12857 Common Stock,
Purchase of Class A 200000 Common Stock,

$0.90

March 192010

$1.00

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More of Defendants’ Cash-Settled Equity Swap Agreements Are Terminated
or

One

21.

On

April27, 2010,

one or more

of the Defendants’ cash-settled shares of the

equity swap agreements, referencing at total of not less than 250, 000
Company’s
Class A
22.
common

stock,

were

terminated.

For purposes of Section 16 of the Act and the rules and regulations

of the SEC

thereunder, the termination of the Defendants’ cash-settled equity swap
as

agreements

described in paragraph 21 above

was

equivalent in all relevant respects to

the non-exempt sale

by Defendants
common

of a total of not less than 250, 000 shares of the

Company’s

Class A

stock at the

price

of $2.20 per

share, such price being the
on

contemporaneous market price of the Company’s Class A common stock
market
on

the open

April27, 2010,

as

described in the table below:
Section 16 Treatment
Number of Shares

Date of Transaction

Price per Share

April27, 2010 April 27, 2010 April 27, 2010 April 27, 2010 April 27, 2010 April 27, 2010 April 27, 2010

Sale of Class A Common Stock Sale of Class A Common Stock Sale of Class A Common Stock Sale of Class A Common Stock Sale of Class A Common Stock Sale of Class A Common Stock Sale of Class A Common Stock

4,400

$2.20

4, 800

$2.20

4,400

$2.20

5,400 10, 400

$2.20

$2.20

40, 400 34, 000

$2.20

$2.20

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Date of Transaction

Section 16 Treatment Sale of Class A Common Stock Sale of Class A Common Stock Sale of Class A Common Stock Sale of Class A Common Stock

Number of Shares

Price per Share

April27, 2010 April 27, 2010 April 27, 2010 April 27, 2010

16, 400

$2.20

15, 300

$2.20

76, 500

$2.20

38, 000

$2.20

FIRST CLAIM FOR RELIEF (AS TO ALL DEFENDANTS) 23.

Plaintiff realleges and incorporates

by reference

the

allegations in

paragraphs

1-22 above.

24.

Certain of the sales described in paragraphs 21-22 above occurred

within six months

of, and at prices higher than, certain of the purchases described in

paragraphs

12-20 above. 25.

Each Defendant had

a

pecuniary interest, directly or indirectly,

in

the shares of the

Company’s Class A common stock purchased and sold as

described in

paragraphs

12-22 above.

26.

Under the Section

“lowest-in, highest-out” method for computing realized
a

profits pursuant to

16(b) of the Act, Defendants realized recoverable profits as
an

result of the transactions described in paragraphs 12-22 above in

amount

equal to

approximately $310, 000.
27. Pursuant to Section

16(b) of the Act,

the

profits realized by

Defendants

as

described in paragraph 26 above inured to and are recoverable by Plaintiff.

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SECOND CLAIM FOR RELIEF (AS TO ALL DEFENDANTS) 28.

Plaintiff realleges and incorporates

by reference

the

allegations in

paragraphs

1-27 above. 29.

This Second Claim for Relief is
or

a

precaution against possible public record, the 16(a)
of the Act,
course

errors

of detail attributable to gaps

inaccuracies in the Section

failure of any

Defendant to file accurate reports

as

required by

or

against the

discovery or execution of additional short-swing trades during the
30. One
or more

of this action.

of the Defendants

purchased and sold shares of a
six

class of the

Company’s equity (or derivative securities thereof) within less than
a

months while

holder of in

excess

of 10% of the

outstanding shares

of any class of the

Company’s equity registered pursuant to
31.

Section 12 of the Act.
30 above cannot be
or

The

purchases and sales described in paragraph

identified by Plaintiff with have not been

specificity because they have not been publicly reported,
and because Defendants have failed
or

accurately reported,

refused to

disclose these trades
32.

(or the absence thereof) upon inquiry from Plaintiff’s counsel.
Each Defendant had
a

direct

or

indirect pecuniary interest in all of described in paragraph 30

the shares of the above.

Company’s equity purchased or sold as

33.

The

purchases and sales

described in paragraph 30 above may be and purchases described herein)

matched

against each other (or with other sales
at

using the

“lowest-in, highest-out” method to arrive

profits,

their exact amount being unknown to

Plaintiff, which profits inured to and are recoverable by Plaintiff.

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PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment:

(a)

Requiring each Defendant to

account for and pay

over

to Plaintiff the

short-swing profits realized and retained by such Defendant in violation of
Section

16(b) of the Act, together with appropriate pre- and post-judgment
suit;
and disbursements

interest and the costs of this

(b)

Awarding to Plaintiff its costs

including reasonable

attorney's, accountant's, and expert witness fees; and (c) Granting to Plaintiff such other further relief as the
and proper.
Court may deem just

Dated: March 21, 2011 New York, New York HUNTER & KMIEC

By:.
Ja
es

A. Hunter

East 44th Street, No. 9A New York, New York 10017 Tel: (646) 666-0122 Fax: (646) 462-3356 E-Mail: hunter@hunterkmiec.com

Attorneys for Plaintif

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