Former CEO Ellis Yan and his brother Solomon are set to buy their former company, TCP International Holdings Ltd., in what should end a tumultuous period for the company and its estranged founder. First the deal terms:
- TCP shareholders will receive $1 per share cash.
- The transaction is subject to approval by at least 90 percent of TCP's shareholders and receipt by the buyers of sufficient financing to repay certain TCP indebtedness.
- It’s expected to close prior to the end of TCP's first quarter of fiscal year 2018.
- TCP’s board unanimously approved the merger.
Now the background: In February, TCP said that the Yans had resigned from the board of directors and were immediately replaced. Although no reason was given for the exit, this story offers some of the details surrounding the event and the events that followed. A month later, TCP reported that it had filed a lawsuit against Ellis, its former chairman and CEO, for actions that involved “unfair competition and deceptive trade practices, tortious interference and violations of restrictive covenants in Yan's employment agreement with TCP.” Included among the allegations was that Ellis had been working with his brother, Solomon, who is TCP’s former vice chairman, and others to set up Quality Light Source LLC as a lighting company to unfairly compete with TCP. This month’s merger agreement lists Quality Light Source GMBH as the acquiring company.