Anita G. Zucker, Trustee of the Anita G. Zucker Trust et al v. Bowl America, Inc. et al

On August 4, 2021, Anita G. Zucker, Trustee of the Anita G. Zucker Trust and Anita G. Zucker Trustee of the Article 6 Marital Trust, (collectively, “Plaintiffs”), represented by Daniel Stephen Sommers of Cohen Milstein Sellers and Toll PLLC, filed a class action against Bowl America, Inc. (“Bowl America” or the “Company”), Bowlero Corp., Duff & Phelps Securities LLC, Cheryl Dragoo, Allan Sher, & others, (collectively, the “Defendants”), seeking declaratory relief, among other reliefs, for allegedly issuing a materially false and misleading Proxy Statement in connection with the proposed merger. This case was filed in U.S. District Court in the District of Maryland with Judge Stephanie A. Gallagher presiding. 

In the complaint, the Plaintiffs alleged that, “This shareholder class action challenges an unfair, misleading, and grossly inadequate merger between Bowl America and Bowlero that was orchestrated by a reckless and self-interested Board of Directors who were intent on forcing the sale of a proven, debt-free, and valuable company at a fire sale price. Instead of leading Bowl America into the future following a temporary shutdown that was caused by the COVID-19 pandemic, the Board of Directors elected to quit; betraying their shareholders, and seeking to liquidate their personal holdings at the earliest opportunity through a forced sale of the Company at a discount to its market price and far below its intrinsic value, while simultaneously issuing a materially false and misleading Proxy Statement on Schedule 14A dated July 13, 2021 (the “Merger Proxy”) -- and breaching their fiduciary duties in the process.” 

The Plaintiffs further alleged that “Certain of the Director Defendants have complete control over the Company and control a majority of the votes on the merger largely by virtue of their holdings of Class B stock which entitles them to ten (10) votes per share, while Plaintiffs and similarly situated class members hold shares of Class A stock entitling them to just one (1) vote per share. The merger is the result of a self-dealing transaction entered into by certain controlling stockholders, Defendants Macklin, Hull and Fabian. The merger price of $44 million dollars is grossly unfair to stockholders as just the unencumbered real estate owned by Bowl America has a value in excess of $50 million dollars. Both D&P, the Company’s financial advisor, and Bowlero, the acquirer, provided substantial assistance to and aided and abetted the Director Defendants’ breaches of fiduciary duties in connection with the merger.”

The Plaintiffs have laid down six claims for relief. The first claim is against Bowl America and Director Defendants for alleged violation of Section 14(a) and Rule 14a-9 of the Securities and Exchange Act of 1934. The second, third and fourth claims are against Director Defendants for alleged violation of Section 20(a) of the Securities and Exchange Act of 1934, breach of fiduciary duties, and breach of Md. Code Ann, Corp. & Ass’ns § 2-405.1(a), respectively. The fifth and sixth claim is against Bowlero and D&P, respectively, for aiding and abetting Director Defendants’ breaches of fiduciary duty. 

In their prayer for relief, the Plaintiffs requested the Court to declare the Merger Proxy materially false and misleading in alleged violation of the securities laws, find that the Director Defendants violated Securities and Exchange Act, breached their fiduciary duties and D&P and Bowlero aided and abetted the said breach, award the Plaintiffs and the Class, damages and their reasonable attorneys’ fees, expenses, expert fees and costs.

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