California Jockey Files Suit, Escalating a Proxy Battle
April 27, 2011
SAN MATEO, Calif. -- California Jockey Club said it filed a lawsuit against a dissident group of shareholders and against Bay Meadows Operating Co. as part of a proxy fight concerning a horse racetrack here. The suit, filed in U.S. District Court in San Francisco, alleges that the defendants violated securities laws in connection with their efforts to replace California Jockey's directors at a shareholders meeting, set for May 12, 2011 shareholders oppose California Jockey's plan to sell 73 acres of land at the racetrack, arguing that the sale could jeopardize racing there. California Jockey is a real-estate investment trust that owns the land where the racetrack is situated. Bay Meadows leases the land from California Jockey and operates the racetrack. Shares of the two companies are traded on a paired basis; they have the same shareholders but different boards. The suit seeks, among other things, to prevent the ``unlawful'' solicitation of proxies for the coming shareholder vote. Defendants in the suit include nine members of a dissident group that calls itself California Jockey Club Shareholders Committee. Another defendant is Johnetta C. Harry, Bay Meadow's chairman who recently threw his support to the group. Roni J. Thelen, a member of the group, declined to comment on allegations in the suit but termed it a ``smoke screen'' for California Jockey's attempts to keep shareholders from learning about real-estate transactions and other matters.
