Tecumseh's planned recapitalization stalled by court order

By Lisa Kerner

Charlotte, N.C., Dec. 23 - The Circuit Court of Lenawee County, Mich., issued an injunction preventing Tecumseh Products Co. from completing its planned stock dividend recapitalization on Dec. 31.

The order was sought by the Herrick Foundation, with a similar motion filed by another shareholder, a Tecumseh news release said.

Tecumseh said it plans to seek a reversal of the court ruling.

"Our board of directors remains firm in its conviction that a timely, efficient and cost-effective recapitalization is in the best interest of all shareholders," Tecumseh chief executive officer Ed Buker said in the release.

"Although we will not be able to execute our stock dividend recapitalization according to our original timeline, we will make every effort to deliver on our commitment to recapitalize the company as soon as possible," Buker added.

As previously reported, Herrick sought to have Tecumseh's stock split declared invalid and to enjoin Tecumseh from issuing a class A share dividend to implement its recapitalization plan.

The recapitalization plan would convert Tecumseh's class A common stock into class B common stock with full voting rights. Tecumseh's board authorized a dividend of two shares of class A common stock for each share of common stock - both class A and class B - outstanding as of the Dec. 15 record date, with the dividend payable on Dec. 31, according to a prior news release.

Based in Tecumseh, Mich., Tecumseh Products manufactures compressor and other products.

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