Q sues Cedar Fair board in federal court, says board didn't disclose nomination process

Ignoring for a moment the accusation that they did anything improper (I skipped that part of the complaint, but it's not like this stuff can skate by in a public company easily), but exactly what damages has Q suffered? They got in at, what, $11, and the units are now trading over $22? At this point, they've doubled their investment.

I'm left with the impression that Q's lawyers went to correspondence law school and barely passed the bar. I'd love for our resident lawyers to read through the complaint and see if there's anything of any meat in there.

I think this is a case of Q throwing the spaghetti at the wall and seeing what sticks. The more legal action they take the more they'll uncover about the board through discovery. The more they know about the inner workings of the board (not that any of it should be secret in a public company) the more likely they'll be to be able to oust the likes of Dick K.

I'm not sure what their long term goal is, though. Take over the board? Sell to the Japanese company that bought Magnum?

That's just it... there doesn't appear to be a long term goal. There's no obvious end game. Kinzel is out in less than a year regardless. The unit price is dramatically higher than when they bought in. The refinancing on long-term debt is stable for now, and I think it's safe to assume it will remain so as the economy continues to improve.

I'm no fan of the board or Kinzel, but this is starting to look mostly like a nuisance.

Not a securities lawyer and I don't play one on TV. That being said, I am not sure what Q's claim for damages would be. As noted, stock price is up since they bought. Had they been able to nominate their own board candidates, who is to say they would have been elected by unitholders? Had they been elected to the board, who is to say the company's performance would have been (or would be going forward) better? So what exactly are Q's damages at this point?

One remedy that is sometimes available in securities fraud cases is rescission. Not sure if it would be available here or if Q views that as a possible exit.

I'm not clear how rescission would be in Q's best interest either.

What I will say about all of these actions by Q is that at least it has helped to pull back the curtain a little. I've noted before that the insitutional investors are starting to question things more...and I think that is positive. I think the "real Kinzel" has been on display more in recent years and I think that will be a positive when it comes not only to his successor but that person's breaking in as well.

It sure says a lot that the company, through Kinzel, was recommending to unitholders to sell off at $11 and the price how now doubled since the winter. He is right about one thing...he should stay away from the nagging finance stuff.