If you must have your day in court, make it a good day

Did This Corporate Board Breach Their Fiduciary Duty?

| Feb 11, 2014 | Uncategorized |

Did the company’s board breach their fiduciary responsibility to their shareholders by withholding information prior to the sale of the company? 

Supreme Court to hear Renaissance Learning case. Justices will consider appeal of Data Key Partners’ lawsuit challenging 2011 sale of Wisconsin Rapids-based educational technology provide

February 11, 2014. By Nathaniel Shuda, Daily Tribune Media, Madison, WI.
wisconsinrapidstribune.com

The Wisconsin Supreme Court will hear a case involving a Wisconsin Rapids-based educational technology provider and its 2011 sale to a European private equity firm.

Renaissance Learning Inc., which sold to London-based Permira Advisors LLC in 2011, remains at the heart of the lawsuit, brought by Data Key Partners, one of the company’s minority shareholders. The lawsuit challenged the sale, alleging that board members breached their fiduciary duties, failed to disclose certain information to shareholders and that Permira aided and abetted such a breach of duty.

The high court will consider two of the original four claims — that board members breached their fiduciary duties and that Renaissance Learning founders Terrance and Judith Paul breached their fiduciary duties as majority shareholders, according to a news release the court issued Thursday.

Clark County Circuit Judge Jon Counsell, acting as a substitute judge in the Wood County case, dismissed all four claims in 2012, but the state Court of Appeals District 4 reversed Counsell’s ruling, reinstating two of the four claims but upholding the dismissal of the claims that alleged Renaissance failed to disclose certain information to shareholders and that Permira aided and abetted such a breach of duty.

“Data Key did not need to allege willful misconduct or other non-compliance with the rule in order to survive the motion to dismiss for failure to state a claim for breach of fiduciary duty against the directors,” according to the Aug. 1 Appellate Court ruling.

During an Oct. 17 meeting, Renaissance shareholders approved the sale, which company officials finalized two days later, officially ending a bidding war between Permira and Bloomington, Minn.-based Plato Learning. As part of the sale, Permira agreed to pay $15 a share in cash to the Pauls, their affiliates and family members, and $16.60 a share in cash to all other shareholders.

Although Plato had offered to pay an equivalent of $16.90 a share, or about $496 million, compared with an equivalent of $15.50 a share or about $455 million offered by Permira, the Pauls said they based their recommendation to sell to Permira on a concern that Plato’s ownership might negatively affect the Wisconsin Rapids area.

The Pauls, whom the Heart of Wisconsin Chamber of Commerce named its Citizens of the Year in 2012, started what later would become Renaissance Learning in 1986, two years after Judith Paul created the company’s landmark product, Accelerated Reader, in the basement of their Port Edwards home.

Renaissance Learning employs about 600 people locally and about 900 worldwide.

Archives

See What Other Clients Say

testimonial-arrow

He actually persuaded me not to settle because he believed that we had a great case. So we took the case to trial and he fought like crazy for me. And we won! It was a really good experience —well, as much as it can be for a lawsuit — and I’m very happy I went with them. I’ve been really blessed to have him as my attorney, so I recommend him whenever I can.”

— Yelp.com review by Daniel M.

See What Other Clients Say

testimonial-arrow

He actually persuaded me not to settle because he believed that we had a great case. So we took the case to trial and he fought like crazy for me. And we won! It was a really good experience —well, as much as it can be for a lawsuit — and I’m very happy I went with them. I’ve been really blessed to have him as my attorney, so I recommend him whenever I can.”

— Yelp.com review by Daniel M.

See What Other Clients Say

testimonial-arrow

He actually persuaded me not to settle because he believed that we had a great case. So we took the case to trial and he fought like crazy for me. And we won! It was a really good experience —well, as much as it can be for a lawsuit — and I’m very happy I went with them. I’ve been really blessed to have him as my attorney, so I recommend him whenever I can.”

— Yelp.com review by Daniel M.

FindLaw Network