Firms Putting Naked Ambition on Display in Bid to Sue Hefner, Playboy

Securities law firms are looking at whether to take on Playboy Enterprise over its plan to take the company private, with one firm already out of the gate with a lawsuit.

On Tuesday, less than one day after Playboy Enterprises announced a proposal to take the company private, one shareholder sued the company and founder Hugh Hefner in Delaware Chancery Court, alleging the plan is detrimental to shareholders.

In Germershausen v. Hefner, shareholder Charles Germershausen seeks to enjoin Playboy and its board of directors from pursuing "a self-dealing going-private proposal." Specifically, the complaint alleges that "the Going Private Plan is the product of a flawed process designed to sell PEI to Hefner and Rizvi Traverse on terms detrimental to plaintiff and the other public stockholders of PEI."

According to the suit, which is seeking class action status, there are about 33.5 million shares of Playboy Enterprises common stock outstanding, held by thousands of shareholders across the country.

Playboy declined to comment. Carmella Keener, of Wilmington, Del.-based Rosenthal, Monhait & Goddess, who is representing Germershausen, also did not return calls seeking comment.

More lawsuits targeting Playboy may be on the way.

Within hours of Playboy's going-private announcement, several national securities law firms — at least half a dozen — announced that they are investigating potential claims on behalf of shareholders. Specifically, lawyers said shareholders are concerned that Hefner — who has offered to buy the company — is getting special treatment because of his celebrity status.

"When you have a celebrity involved that is taking his company private — that he founded — it's especially concerning," said Hamilton Lindley of Dallas-based Goldfarb Branham, who is heading up a team of six lawyers looking at the Playboy proposal. "They are co ...