USA Truck, Knight agree to dismiss lawsuit over public bids
“We are pleased that the parties have reached a settlement. USA Truck’s management team and employees have been focused on executing plans to restore the company’s profitability and unlock its earnings leverage potential through improved operational excellence, profitable revenue growth and cost effectiveness,” USA Truck officials said in a news release.
The Trucker News Services
VAN BUREN, Ark. — USA Truck said Feb. 4 it had entered into a settlement agreement with Knight Transportation of Phoenix that dismisses all claims between the two parties arising from the litigation USA Truck filed against Knight Transportation on Oct, 10, 2013.
In connection with the settlement, USA Truck and Knight Transportation have entered into a standstill agreement and a voting agreement effective through Sept. 30, 2014.
The standstill agreement contains customary terms, including that through Sept. 30, Knight Transportation will not acquire any securities or assets of USA Truck, propose any tender or exchange offer to acquire USA Truck securities or any consent solicitation, or seek representation on the Board of Directors of USA Truck.
In addition, pursuant to the voting agreement, Knight Transportation has agreed not to vote the USA Truck shares it beneficially owns at the company’s 2014 shareholder meeting.
“We are pleased that the parties have reached a settlement. USA Truck’s management team and employees have been focused on executing plans to restore the company’s profitability and unlock its earnings leverage potential through improved operational excellence, profitable revenue growth and cost effectiveness,” USA Truck officials said in a news release. “Nevertheless, by eliminating any of the distractions that have been created by this litigation, the settlement is a positive outcome for USA Truck’s employees, customers and shareholders.”
In conjunction with the settlement, USA Truck and Knight Transportation will file a joint stipulation to dismiss the lawsuit in its entirety with prejudice.
"Our agreement with USA Truck represents a positive outcome for our company, as it resolves all related litigation while preserving our flexibility with respect to our investment," Knight Chairman and CEO Kevin Knight said in a news release.
"Knight Transportation may continue to own shares in USA Truck and, subject to the terms of the agreement, may consider its options in the future regarding that investment," he said
Knight offered $9 per share in cash for USA Truck in August. USA Truck rejected the offering, saying it undervalued the company. In October, after Knight made its offer public, USA Truck filed a breach of contract lawsuit against Knight, alleging that Knight "improperly" used USA Truck's confidential information "to begin a creeping hostile acquisition of USA Truck."
The lawsuit sought to require Knight to divest the USA Truck shares that USA Truck says Knight acquired in violation of the confidentiality agreement. Knight had steadily increased its stake in USA Truck after making the offer public. A trial in the case had been set for April 14.
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