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Take Back EMAK, LLC Provides Litigation Update

LOS ANGELES, Nov. 10 /PRNewswire/ -- Shareholder group Take Back EMAK, LLC is pleased to report that the Delaware Court of Chancery has agreed to hear on an expedited basis the case filed by Don Kurz and Sems Diversified Value, LP, challenging the recent exchange agreement with the preferred stockholder. The hearing is set for December 4th, 2009. Plaintiffs allege that the exchange agreement, which grants the preferred stockholder the power to cast 28% of the vote in the election of all directors, was designed to disenfranchise common shareholders and defeat the current consent solicitation. Further, the Delaware lawsuit challenges a new "proxy put" that may trigger the preferred stockholder's $25 million+ liquidation preference if Take Back EMAK succeeds in electing new directors.

At the hearing on December 4th, the plaintiffs will ask the Court of Chancery to rule that the preferred stockholder's shares not be counted for purposes of the consent solicitation and that the consent solicitation does not trigger the proxy put. This relief will allow all common stockholders a free and unfettered choice, untainted by the Board's effort to stuff the ballot box. EMAK Worldwide's CEO recently disparaged the litigation and blamed us for forcing EMAK to spend money to defend it. As the largest group of common stockholders, we certainly have no interest in the Company spending money on litigation. We ask shareholders to await the Court of Chancery's decision on the merits of the claims. In the meantime, we ask shareholders to consider why the Board placed 28% of the vote and a $25+ million put right in the hands of the preferred stockholder just after the commencement of the consent solicitation. We encourage the Board and CEO to look in the mirror, accept responsibility for their actions, and allow common stockholders a fair vote on EMAK's future.

We wish to note that at the same meeting the Board gave the preferred stockholder the power to cast 28% of the vote, the Board also voted to reappoint the preferred stockholder's designee, Jeffrey Deutschman. Thus, the preferred stockholder kept its representation on the board at the same time it was granted new power to vote on all directors, and a new "proxy put" if Don Kurz and his affiliates elect new directors. The exchange transaction does not help align the interests of the preferred stockholder with the common stockholders. It disenfranchises common stockholders and grants the preferred stockholder new power to impose its own interests on EMAK. As we have previously stated, the preferred can convert their security to common shares at any time if they want true alignment.

Take Back EMAK urges all stockholders to sign the white consent card they should have received in the mail to remove three current directors and replace them with three new qualified and committed directors to your Board. Please visit takebackemak.com for frequent updates. We thank you for your support.

SOURCE Take Back EMAK, LLC