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Tile Shop Halts Stock Deregistration As It Fights Investor Suits
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By Rose Krebs | November 12, 2019
Tile Shop Holdings Inc. said Monday that it has halted the process to deregister its stock per an order from the Delaware Chancery Court after investors filed derivative suits last week seeking to thwart what they contend is a takeover attempt led by the company's former CEO.
Tile Shop said it had intended to file forms with the U.S. Securities and Exchange Commission this week to move forward with plans announced last month to delist its common stock from Nasdaq and deregister its stock under SEC regulations, meaning it would not have to file periodic financial reports with the regulatory agency.
Last week, two investment groups K-Bar Holdings LLC and Wynnefield Capital Inc. filed derivative suits asserting that the company's founder and former CEO Robert A. Rucker, who sits on the company’s board, and certain other directors are engaged in a scheme to take control of the company by purchasing stock without paying a fair price.
K-Bar asked the court to temporarily bar the directors from purchasing more company stock and halt the deregistration process. A hearing was scheduled for late Friday afternoon, with no order officially posted as of Tuesday afternoon. Tile Shop said Monday that it was taking measures to meet a temporary court order.
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