MSN Money – A hedge fund that is agitating for leadership change at Bally Total Fitness Holding Corp. said Thursday that a Delaware court has denied a motion by the health club operator to speed upthe legal process that would trigger its antitakeover provision.
The hedge fund, collectively known as Liberation Investments, said the court denied a motion by Bally for expedited discovery in its action seeking to determine that Bally’s “poison pill” was triggered. A poison pill is a strategy used by companies to thwart a hostile takeover attempt by another party, by making it more expensive.
The court’s decision deals a legal setback to Bally, which has accused Liberation and another fund, Pardus Capital Management, of conspiring to take over the gym operator, which has put itself up for sale.
The two hedge funds have each bought large stakes in Bally, and have called for the ouster of Bally’s chief executive, Paul Toback, and other changes in corporate governance.
