US court turns down Apollo plea for Cooper suit dismissal

Apollo had sought that Cooper's case be thrown out as it hadn't lived up to its part of the bargain

Apollo Tyres has lost a bid for dismissal of US-based Cooper Tire's lawsuit seeking to force a $2.5-billion takeover, paving the way for a trial next month.

Apollo had asked a judge in Delaware last week to throw out Cooper's case, contending the Ohio-based company hadn't lived up to its part of the bargain and the $35-a-share deal shouldn't go through.

There's a need "to develop the facts", and lawyers should "prepare for trial" if they can't settle the case, Delaware Chancery Court Judge Sam Glasscock III said on Tuesday in a telephone hearing.

Cooper has been "unable for a matter of months to access basic financial material about a significant portion of its business," Raymond DiCamillo, an Apollo lawyer, had said in an October 18 letter to the judge.

John Hardiman, another of Apollo's lawyers, told Glasscock on Tuesday the buyout was to be completed "if, and only if, all conditions have been satisfied".

An attorney for Cooper, Stephen Norman, said in a letter to the judge: "This court has already twice rejected the very same legal argument."

Robert Faxon, also a lawyer for Cooper, told Glasscock the problems with the United Steelworkers union in the US and a strike at a Chinese partner's tire operations, were risks "that the parties contemplated" and now, Apollo has "switched to litigation mode" to back out.

Cooper, based in Findlay, Ohio, had said on June 12 that it would be bought by Apollo. Cooper later sued Apollo to enforce the buyout after the Gurgaon-based company failed to close the deal by an October 4 deadline.

Cooper contends that Apollo agreed to use its "reasonable best efforts" to complete the transaction or pay a $112.5-million "reverse break-up fee" to walk away.

Apollo based its dismissal request on Cooper's contention that it "has no control over" its Chinese joint venture partner Chengshan Group Co and cannot get its books and records. The partnership also is refusing to produce any Cooper brand tires, according to testimony.