Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC (“KSF”), announces that KSF has commenced an investigation into B. Riley Financial, Inc. (NasdaqGM: RILY).
In 2018, the Company was engaged by Vintage Capital Management, LLC (“Vintage”) to provide financing for its acquisition of Rent-A-Center, Inc. (“RAC”), also guaranteeing a $126.5 million termination fee for the transaction. Per the terms of the Merger Agreement, if the transaction’s End Date (December 17, 2018) passed without an extension being requested, RAC was vested with the option of terminating the Agreement, thereby potentially rendering Vintage and B. Riley liable for the reverse termination fee. The End Date passed without notice of an extension being provided, resulting in RAC terminating the agreement and demanding payment of the termination fee.
Recently, the Delaware Chancery Court presiding over the subsequent litigation ruled that RAC’s termination of the merger was valid, noting that “Vintage and B. Riley personnel, in the context of this $1 billion-plus merger, simply forgot to give such notice [of extension],” while reserving judgment on the Company’s liability for the termination fee, which it noted was “enormous” compared to typical fees.
KSF’s investigation is focusing on whether B. Riley’s officers and/or directors breached their fiduciary duties to B. Riley’s shareholders or otherwise violated state or federal laws.
If you have information that would assist KSF in its investigation, or have been a long-term holder of B. Riley shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-877-515-1850 or email KSF Managing Partner Lewis Kahn (email@example.com), or click here.