October 4, 2018
Following Rowley Law PLLC’s announcement that it was investigating potential claims against Essendant, the company’s shareholders have now filed a complaint against it.
In legal documents viewed by The Recycler, Essendant shareholder Joseph Pietras has brought a class action against the company on behalf of himself and other “similarly situated public shareholders”.
The complaint, filed on 27 September 2018 in US District Court for the District of Delaware, cites violations of the Securities Exchange Act of 1934.
The plaintiff, Pietras, is seeking “to enjoin the expiration of a tender offer” made by Staples Inc. to acquire all of Essendant’s issued and outstanding shares.
The court papers state that on 14 September 2018, Essendant entered into an Agreement and Plan of Merger, whereby every shareholder would receive $12.8 (€11.1) per share.
Later, on 24 September 2018, the legal documents claim that Essendant’s Board “authorised the filing of a materially incomplete and misleading Schedule Solicitation/Recommendation Statement” in order to convince its shareholders to tender their share.
In particular, this Statement contained misleading information regarding the background to the proposed transaction.
The Tender Offer is scheduled to expire at one minute after 11:59pm New York time on 22 October 2018.
The plaintiff is seeking to enjoin Essendant from closing the Tender Offer “or taking any steps to consummate the proposed transaction, unless and until the material information discussed […] is disclosed to Essendant shareholders”.
In addition, Pietras and the other shareholders are seeking the rescinding of the merger agreement, or the awarding of rescissory damages, as well as demanding that the defendants account to the shareholders for “all damages suffered as a result of their wrongdoing.”
A jury trial is demanded in this case.
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