K2/Jarden Deal Faces Shareholder Class Action Suit

A union pension fund has filed a lawsuit against K2 and its board of directors for an alleged breach of fiduciary duty in accepting a $1.2 billion cash and stock buyout offer from Jarden Corp. The Steamfitters Local 449 Pension and Retirement Security Fund of Pittsburgh, Pa., filed the lawsuit in San Diego Superior Court.

The lawsuit, which seeks class action status, alleges that K2 and its board of directors, approved the deal on April 24 at an unfair and inadequate price, among other allegations. The lawsuit asks the court to prevent the deal from moving ahead. K2 said it believed the lawsuit is without merit and intends to respond accordingly.

K2/Jarden Deal Faces Shareholder Class Action Suit

K2 Inc. and the members of K2’s board of directors (including two of whom who are executive officers of K2) had been named as defendants in a putative shareholder class action lawsuit concerning the sale of K2 pursuant to the merger agreement executed on April 24, 2007 between K2, on the one hand, and Jarden Corporation and a wholly-owned subsidiary of Jarden Corporation, on the other hand. The lawsuit was filed in California Superior Court for the County of San Diego.

The lawsuit alleges, among other things, that K2’s directors breached their fiduciary duties in approving the proposed merger and that the consideration payable to K2’s shareholders in the merger is unfair and inadequate. The plaintiff is asking, among other things, that the transaction contemplated in the merger agreement be enjoined or, if the merger is completed, that it be rescinded. K2 believes the lawsuit is without merit and intends to respond accordingly.

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