Litigation
Engineer TRC Fends Off Lawsuits After Merger
In the wake of its merger with an investment fund, TRC Cos. has been busy swatting away pesky shareholder lawsuits driven by law firms who specialize in such litigation.
The Lowell-based engineering, environmental consulting and construction management services firm, which recently obtained shareholder approval for a merger with affiliates of New Mountain Capital, has won a federal court decision dismissing a shareholder lawsuit organized by Stamford, Conn.-based law firm Levi & Korsinsky.
The flurry of litigation appears to have had little or no impact on the recently completed merger, approved by shareholders on June 21.
The decision by a federal court judge in Connecticut was “with prejudice,” meaning the plaintiff is also on the hook for fees related to the litigation.
The flurry of litigation, however, appears to have had little or no impact on the recently completed merger, approved by shareholders on June 21.
New Mountain Capital acquired TRC, No. 23 on ENR’s list of top designers, for $17.50 a share in cash.
“The completion of this transaction marks the beginning of a new chapter for TRC and is an important step in executing on our long-term growth strategy,” said TRC Chairman and Chief Executive Officer Chris Vincze, in a press statement.
TRC has also faced a lawsuit put together by Brodsky & Smith, a Pennsylvania-based firm that also specializes in such litigation and the threat of additional shareholder litigation by Maryland-based Brower Piven, which announced an “investigation” in April. In recent weeks, Brower Piven has announced similar suits against Mattel Inc. and Axiom Holdings.
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The various law firms, in announcing efforts to recruit disgruntled shareholders for lawsuits against TRC, argued the company had failed to adequately shop and obtain the best possible price.
But in a statement filed with the U.S. Securities and Exchange Commission, TRC states that least 21 different potential buyers signed confidentiality statements and other legal paperwork in order to look at the company’s financials.
The shareholder lawsuit organized by Levi & Korsinksky, also argued TRC failed to disclose a number of facts related to the merger in its SEC filings.
However, the federal court ruling noted TRC later released the additional information on May 31st in an amendment to its proxy statement, including additional details about how the acquisition price was determined.
“TRC filed an amendment to the Proxy Statement with the SEC that included certain additional information relating to the Transaction that addressed and mooted claims regarding the sufficiency of the disclosures in the Proxy Statement,” a federal court judge in Connecticut found.
