Hefner Acted Properly in Taking Playboy Private, Lawyers Say
CHICAGO — Lawyers for Hugh Hefner say in a court filing that the Playboy founder acted properly when he took the company private last March.
In a court filing in connection with a shareholders lawsuits over the $207 million deal, Hefner’s lawyers argue that Hefner didn’t violate legal duties to other investors by backing a parternship’s acquisition of all Playboy stock he didn’t already own for $6.15 a share, according to Bloomberg.com.
Hefner’s lawyers seek to have the suit dismissed saying, “Mr. Hefner was fully justified in doing the things about which plaintiffs complain as a matter of law.”
Hefner partnered with private equity firm Rizvi Traverse Management and succeeded in taking the company private.
The $6.15-per-share deal was funded with $195 million of debt and $185 million from Traverse and Playboy management, including Hefner.
Playboy directors backed the buyout, which provided a 50 percent premium, as being in shareholders’ “best interests,” the filings show.
Some Playboy investors contend they were shortchanged in the buyout and argue Hefner took the company private “at an inadequate price,” according to a 2010 suit filed in state court in Wilmington, Del.