Shares of Nam Tai Property (NYSE:NTP), a China-based owner, developer, and operator of technology parks, spiked today after a court handed down a ruling involving a lawsuit between Nam Tai and one of its shareholders, IsZo Capital Management.
The stock was up by as much as 31.5% today and had gained 16.8% as of 3:10 p.m. EST.
IsZo Capital, which owns about 11% of Nam Tai's outstanding shares, said today that a court ruled in its favor against Nam Tai's $170 million private placement, which distributed more than 18 million shares to Kaisa Group Holdings Limited and other companies.
A private placement occurs when a company sells stock or bonds to pre-selected investors.
The statement said that the court found that Nam Tai's board of directors "acted for an improper purpose" when initiating the dilutive transaction and added that, "It was determined that execution of the private placement was a breach of the directors' fiduciary duties" in order to give Kaisa de facto control of Nam Tai.
According to the press release, Nam Tai must continue with a special shareholder meeting to vote on removing and replacing "Kaisa-affiliated directors from the Board." Based on today's share price jump, it appears most of Nam Tai's investors were pleased with the outcome of the lawsuit. Including today's gains, Nam Tai's stock is up 61.7% over the past 12 months.