Jameson Inns sued over acquisition of Kitchin Hospitality

<p>Jameson Inns Inc. said Wednesday that it faces a lawsuit challenging its proposed acquisition of Kitchin Hospitality, which leases and operates all Jameson hotel properties.</p><p>The class action lawsuit was brought on behalf of Jameson Inns shareholders and the company itself. It was filed Oct. 31 in the Superior Court of DeKalb County, Ga., according to a Securities and Exchange Commission filing Tuesday.</p><p>In addition to the real estate investment trust, which is named as a nominal defendant, four Jameson Inns directors _ Thomas W. Kitchin, Robert D. Hisrich, Michael E. Lawrence and Thomas J. OHaren _ are named as defendants.</p><p>The lead plaintiff, Tammy Newman, said that the amount that Jameson Inns has proposed paying in the transaction constitutes a gross waste of corporate assets and a breach of fiduciary duty, the SEC filing said.</p><p>The plaintiffs allege that the purchase price that Jameson Inns has proposed paying is materially greater than Kitchin Hospitalitys true value.</p><p>The plaintiffs also said in the suit that Jameson Inns preliminary proxy statement, which was filed with the SEC on Nov. 10, contains misrepresentations and omissions of material facts, the companys filing said.</p><p>Jameson Inns, based in Atlanta, said that it believes the claims are without merit and that the defendants plan to defend themselves vigorously against the action, the filing said.</p><p>In the suit, the plaintiffs asked the court to block the purchase of Kitchin Hospitality or to direct the defendants named in the suit to pay the company rescissory damages, according to the Form 8-K. The plaintiff asked that the defendants establish and maintain a system of internal controls and procedures sufficient to prevent repetition of acts of the type complained of, the filing said.</p><p>The plaintiffs also asked that all damages, costs or financial losses that come as a result of the transaction be paid by the defendants, according to the SEC filing.</p><p>Jameson Inns shareholders are scheduled to vote on the transaction at a meeting Nov. 25.</p>

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