Select Comfort vote recount stalled by Sterling Partners litigation

By Lisa Kerner

Charlotte, N.C., Sept. 3 - Sterling Partners is seeking a temporary restraining order against Select Comfort Corp. in connection with the company's shareholder vote count.

The votes are being recounted following the rejection by Select Comfort shareholders of Sterling Partners' proposed investment in the company. Only 49.94% of shares entitled to vote at the special meeting on Aug. 27 voted in favor of the deal.

Sterling, in an action filed in the Court of Chancery of the State of Delaware, is asking that Select Comfort engage an additional independent third party other than Broadridge Financial Solutions, Inc. to conduct the vote recount, according to a Select Comfort news release.

In addition, Sterling wants the court to prohibit Select Comfort from altering any documents related to the shareholder vote and from terminating the parties' May 22 securities purchase agreement.

The agreement was to sell 50 million shares of Select Comfort's common stock to Sterling Partners for $0.70 per share, or a total of $35 million.

According to Select Comfort, Sterling Partners' claims are without merit.

As previously reported, the agreement included a termination fee payable by Select Comfort of $1.5 million or $4 million under certain circumstances if the placement did not close.

Select Comfort makes adjustable-firmness beds and is based in Minneapolis.

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