Insider’s note: Busby Outdoor has filed suit in the second judicial court district of Jones County Mississippi seeking damages relating to sale of certain assets to Trailhead Media in July 2020. Here’s a summary of the complaint based on the court documents.
Busby Outdoor LLC (“Busby”) filed a complaint on May 20, 2021 in the Second Judicial District in Jones County, Mississippi. Included as defendants (“Trailhead”) are:
- Trailhead Media, LLC
- Viking Global Investors LP
- Robert MacMillan, Trailhead Media CEO
- Elizabeth Jones, Trailhead Media CFO
Busby acknowledges that both parties entered into an Asset Purchase Agreement on July 9th, 2020, selling certain Busby assets to Trailhead for a purchase price of $33 million, with $25.5 million paid at closing and a holdback in the amount of $7.8 million.
Busby alleges that prior to the closing date, Trailhead used inside information to take advantage of the potential purchase price of the Busby assets.
Busby admits that it was having cash flow problems and Trailhead used inside information to contact Busby creditors, taking advantage of the fact that Busby was under financial pressure from its creditors to reduce the proposed sale from a proposed $42 million all cash transaction to the structure which was agreed to and signed by the parties.
Busby asserts that Trailhead manipulated the assets conveyed in the Asset Purchase Agreement to keep Busby from meeting the thresholds required for payment of a holdback. Busby indicates that Trailhead advised Busby that Busby’s threshold amount to receive the first holdback amount (potentially $3 million) due April 30, 2021, had not been achieved.
Busby is requesting compensatory damages, for attorney fees and litigation costs, pre-judgement and post-judgement interest and punitive damages.
Additional information on the complaint and companies
Billboard Insider contacted both parties. Busby would not comment at the advice of their counsel. Trailhead CEO Robert Macmillan told Billboard Insider this:
“As a matter of company policy, Trailhead Media does not comment on active litigation. That said, we value our relationships with, and take seriously our commitments to all stakeholders and business partners, past and present. We deny any wrongdoing and intend to vigorously contest the allegations made in the lawsuit”.
Insider’s take: Trailhead hasn’t yet responded to complaint, so at this point we only have details from Busby’s filing. Trailhead has acquired at least 10 out of home companies during the past year and this is the first litigation which Billboard Insider is aware of. We will provide updates as we learn more.
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