FINISH LINE GETS COLD FEET – AND IS NOW BEING SUED BY GENESCO

Shoe and headwear retailer Genesco filed a lawsuit against The Finish Line Inc., accusing them of trying to back out of a planned $1.5 billion buyout. The lawsuit seeks an order to enforce Finish Line's agreement with investment bank UBS AG to finance most of the deal for Genesco.

Indianapolis-based Finish Line has "developed a case of buyer's remorse" since striking the $54.50 per-share deal for Genesco in June, the lawsuit claims. UBS stopped processing the closing documents for the deal because of concerns about Genesco's financial performance since the deal was struck.

Genesco's chairman and CEO Hal N. Pennington accused UBS of trying to back out of the deal because of the upheaval in the credit market and not because of Genesco's financial performance.

"We want a court of competent jurisdiction to enforce our rights under the Merger Agreement and for The Finish Line and UBS to live up to their obligations,” said Pennington. The lawsuit said UBS' is “slow-walking" to get a price concession, but that Genesco has no intention of renegotiating.

If the deal isn't completed on time, it could lead to "a massive claim against Finish Line by Genesco which will likely force Finnish Line into bankruptcy," said a Genesco court filing. To make matters worse Genesco sales and earnings have declined.

The moral of the story might be - when something seems too good to be true – it usually is. We’ll keep you posted on the outcome – but it goes to show you that all relationships are not a day at the beach!