Harbert Discovery Fund Files Lawsuit Seeking to Hold Enzo Board Accountable for Acts of Entrenchment and Illegal Maneuvers
Details Enzo’s Efforts to Manipulate Corporate Machinery to Disenfranchise Shareholders
Birmingham, AL, February 6, 2020 – Harbert Discovery Fund, LP and Harbert Discovery Co-Investment Fund I, LP (collectively “HDF”), the beneficial owners of more than 11.8% of the outstanding shares of Enzo Biochem, Inc. (NYSE: ENZ) (“Enzo” or the “Company”), today announced that it has filed a complaint in the U.S. District Court for the Southern District of New York asserting direct claims against Enzo and asserting both direct and derivative claims against members of its Board of Directors (the “Board”) (Case 1:20-cv-01021). The complaint alleges that Enzo has engaged in brazen acts of entrenchment and misuse of the corporate machinery in an effort to keep Barry Weiner on the Board after most of Enzo’s shareholders had voted and it had become clear that Weiner would be removed.
Commenting on the complaint, Kenan Lucas, Managing Director and Portfolio Manager of HDF, stated: “Enzo’s refusal to accept the will of its shareholders is highly unfortunate. With this misguided and illegal attempt to disenfranchise shareholders, the Board has proven a willingness to go to any extreme, including violating their own Charter, in an attempt to further entrench themselves. Enzo has turned what should be a fair and equitable process on its head by changing the rules of the game in the final seconds of the fourth quarter. The Company’s actions have left us with no choice but to bring this litigation and seek to defend the rights of shareholders.”
HDF’s complaint details the following:
The full text of Enzo’s complaint is available at https://cureenzo.com/wp-content/uploads/2020/02/HDF-Complaint-2-6-20.pdf..
Please visit our website at www.cureenzo.com to learn more.
Important Information about Participants in a Proxy Solicitation:
Harbert Discovery Fund, LP (“Harbert Discovery”), Harbert Discovery Fund GP, LLC (“Harbert Discovery GP”), Harbert Discovery Co-Investment Fund I, LP (“Harbert Discovery Co-Investment” and together with Harbert Discovery, the “Discovery Funds”), Harbert Discovery Co-Investment Fund I GP, LLC (“Harbert Discovery Co-Investment GP”), Harbert Fund Advisors, Inc. (“HFA”), Harbert Management Corporation (“HMC”), Jack Bryant (“Mr. Bryant”), Raymond Harbert (“Mr. Harbert”) and Kenan Lucas (“Mr. Lucas” and together with Harbert Discovery, Harbert Discovery GP, Harbert Discovery Co-Investment, Harbert Discovery Co-Investment GP, HFA, HMC and Messrs. Bryant and Harbert, the “Harbert Discovery Parties”) (collectively, the “Participants”) have filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy statement and accompanying form of proxy to be used in connection with the solicitation of proxies from the shareholders of Enzo Biochem, Inc. (the “Company”) in connection with the annual meeting of shareholders of the Company (the “Annual Meeting”). All shareholders of the Company are advised to read the definitive proxy statement and other documents related to the solicitation of proxies by the Participants in respect of the Annual Meeting, as they contain important information, including additional information related to the Participants, their nominees for election to the board of directors of the Company and the Annual Meeting. The definitive proxy statement and an accompanying proxy card will be furnished to some or all of the Company’s shareholders and are, along with other relevant documents, available at no charge on the SEC website at http://www.sec.gov/ and are available upon request from the Participants’ proxy solicitor, Okapi Partners, by calling (888) 758-6707 (banks and brokers call collect (212) 297-0720).
Additional information about the Participants can be found on the Definitive Proxy Statement filed by the Participants on December 6, 2019.
About Harbert Discovery Fund (HDF)
HDF invests in a concentrated portfolio of publicly traded small capitalization companies in the US and Canada. We perform significant due diligence on each portfolio company prior to investing. In addition to researching all publicly available information and meeting with management, our diligence includes substantial primary research with industry experts, consultants, bankers, customers and competitors. We often spend months or years researching ideas before making an investment decision and we only invest in companies that we believe are significantly undervalued, and where there is the potential for change to enhance or accelerate value creation. In an effort to unlock this potential value, we seek to work directly with the boards and management teams of our portfolio companies privately and collaboratively, engaging with them on a range of factors including governance, board composition, corporate strategy, capital allocation, strategic alternatives and operations. We have effected positive, fundamental changes at our current and past investments through this behind-the-scenes, constructive approach. HDF currently has board representation at three of our portfolio companies. In each case, changes to the board were agreed upon privately and it is our strong preference in every investment to avoid the unnecessary distractions and costs of a public proxy campaign.
About Harbert Management Corporation (HMC)
HMC is an alternative asset management firm with approximately $7.0 billion in regulatory assets under management as of December 31, 2019. HMC currently sponsors nine distinct investment strategies with dedicated investment teams. Additional information about HMC can be found at www.harbert.net.
Okapi Partners LLC
Bruce Goldfarb / Chuck Garske / Jason Alexander, 212-297-0720
Sloane & Company
Dan Zacchei / Joe Germani, 212-486-9500
email@example.com / firstname.lastname@example.org