NEW YORK, June 2, 2003 (PRIMEZONE) -- The law firm of Kirby McInerney & Squire, LLP announces that on June 2, 2003, Chapman Capital L.L.C. ("Chapman Capital"), a California-based investment advisor to Chap-Cap Partners, L.P. ("Chap-Cap"), filed a class action suit in the Chancery Court for the State of Delaware in New Castle County charging Nelson A. Carbonell, Jr. and other directors of Cysive, Inc. ("Cysive") (Nasdaq:CYSV) with breach of fiduciary duties to Cysive shareholders in connection with their approval of a buyout offer from an entity controlled by Cysive CEO, President and Chairman of the Board, Nelson Carbonell Jr. The other Cysive directors being sued as follows: Daniel F. Gillis (former CEO of SAGA Systems, Inc.), John R. Lund (CFO of Cysive), Kenneth H. Holec (interim CEO of PeopleClick, Inc. and former CEO of ShowCase, Inc.) and John S. Korin (Executive Director, Strategic Development for Northrop Grumman Information Technology division of Northrop Grumman Corporation).
On May 30, 2003, Cysive announced that it entered into an Agreement for the company to be acquired by Snowbird Holdings, Inc., an entity owned by Carbonell, for $3.22 in cash. Together with Snowbird, Carbonell is currently the beneficial owner of more than 35% of Cysive's common shares outstanding.
The lawsuit alleges that the Carbonell/Snowbird offer represents grossly inadequate compensation to Cysive's public shareholders. In a May 7, 2003 announcement, Cysive estimated that on June 30 it would have $121 million to $125 million in cash, or $4.25 to $4.39 a share. At $3.22 per share, the Snowbird/Carbonell offer amounts to a steep discount to the company's cash position (without even considering the value of other company assets, including Cysive's Cymbio product line, the future revenues of which Carbonell often and recently has vaunted). Furthermore, the deal was announced just 17 days after the company announced it was considering a sale. The lawsuit alleges that Cysive's board could not possibly have shopped the company in good faith to prospective third party buyers in such a short time period. Moreover, the deal seems to place no value on the estimated $10-20 million in income taxes that Carbonell and related entities may avoid by precluding the wholesale liquidation of Cysive's assets and subsequent distribution to all shareholders that inevitably would follow.
Chap-Cap is the owner of over 1.6 million common shares (5.7%) of Cysive stock and as such is a long-term shareholder of the Company, with Chap-Cap making its first investment in Cysive shares in August 2001. Chapman Capital is committed to ensuring that the rights of all of Cysive's public shareholders are safeguarded from any potential breach of fiduciary duty by those individuals entrusted with maximizing the value of such shareholders' investment. Chap-Cap, a Delaware limited partnership (the "Partnership"), seeks above-average risk-adjusted returns while minimizing downside through a disciplined program of value investing, arbitrage and short selling/special situations investing. More information about the lawsuit can be obtained from Chapman's counsel:
Roger W. Kirby Ira M. Press (ipress@kmslaw.com) Kirby McInerney & Squire, LLP 830 Third Avenue, 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca