ZS Crossover II L.P. Files Lawsuit Against Capital Southwest Corporation
NEW YORK, Apr. 14 /PRNewswire/ --
NEW YORK, April 14 /PRNewswire/ -- ZS Crossover II L.P. announced today that it has filed a petition in the District Court of Dallas County, Texas to compel Capital Southwest Corporation to provide Crossover II with certain books and records it has requested to inspect pursuant to Texas law. Crossover II had previously requested in a letter to Capital Southwest to examine certain books and records, including a list of the Company's shareholders, pursuant to Texas law. Since Capital Southwest has refused to comply with Crossover II's request, Crossover II has filed a petition in the District Court of Dallas County, Texas to enforce its rights and compel Capital Southwest to do so. Crossover II made the initial request in order to facilitate its communications with shareholders regarding the capitalization of the Company, as well as in connection with, but not limited to, Crossover II's non-binding shareholder proposal for consideration at the 2008 Annual Meeting, among other things.
Ned Sherwood, speaking on behalf of Crossover II, stated, "This lawsuit is by no means our preferred course of action but rather is our last resort to enforce our proper rights as shareholders of Capital Southwest. The Company's denial of our rightful request to inspect certain books and records is just the latest example of the Company's attempt to silence the voice of its shareholders. From the Company's attempt to exclude our 'non-binding' proposal from consideration by shareholders at this year's Annual Meeting to the Company's recent outright refusal to recognize our rights as shareholders under Texas law, Capital Southwest has demonstrated that it is more interested in wasting corporate assets to combat its shareholders than it is in working with its shareholders to maximize the value of the Company."
Sherwood continued, "What is particularly appalling about Capital Southwest's attempts to suppress its shareholders' rights is that the Company has for long claimed to be a staunch supporter of such rights. To quote directly from the company's 2002 annual letter, 'Corporate governance ... has usually been inadequate. Now, it is largely ineffective as boards of directors and compensation committees ignore their obligations to shareholders, yielding to the insatiable demands and unbridled greed of arrogant (but replaceable) managers ... The impending takeover of Corporate America by self-serving elitist managers may prove to be far more damaging to capitalism than anything Karl Marx could have conceived.' Capital Southwest's recent stance with respect to its shareholders' rights puts the Company's directors and management in the same camp as those that it vilified in this statement."
ZS Crossover II L.P.
CONTACT: Ned Sherwood, +1-212-398-6200
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