This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Business News Legal Live Business
Another law firm pursuing action against SFX
By Chris Cooke | Published on Thursday 5 November 2015
A third law firm has announced it is plotting legal action against EDM powerhouse SFX in relation to founder Robert FX Sillerman’s attempts to take the company back into private ownership.
As much previously reported, earlier this year Sillerman announced he was planning to buy back all the shares he doesn’t currently control in the dance music festival promoter and Beatport owner, which he floated back in 2013. But then in August he admitted he couldn’t raise the money to finance the deal at the offer price he had made, mainly because SFX’s share price had tanked during this process.
The dance firm’s independent directors then announced that they were accepting all and any new bids for the company. They are now considering their options, including a new less generous offer from Sillerman to take complete ownership of the business.
Some have accused SFX and/or Sillerman of making misleading statements after the latter originally announced his intent to retake control of the former, and that that may have violated federal securities law in the US. Those violations, some allege, negatively impacted on shareholders, especially those who bought shares in the company in the early part of this year, and two law firms previously announced they were investigating this matter, encouraging affected investors to come forward.
They are now joined by Lundin Law PC, which yesterday announced it had filed a class action against SFX “concerning possible violations of federal securities laws between 25 Feb 2015 and 17 Aug 2015. Investors who purchased or otherwise acquired shares should contact the firm in advance of the 10 Nov 2015, lead plaintiff motion deadline”.
The law outfit alleges in its complaint that SFX “made misleading statements and/or failed to disclose a proposed acquisition of the company by SFX’s Chief Executive Officer and largest shareholder. Specifically, the investigation will focus on the CEOs repeated affirmations of his commitment to acquire SFX, and whether he failed to disclose that he did not have any financing in place at the time he made his proposal”.
All three law firms looking into this matter are yet to confirm any clients that they are representing, and they are likely still seeking affected investors to join their class actions. Though if any of the litigation proceeds, it could put a spotlight on events behind the scenes at SFX HQ this year. Meanwhile we await an update from the company’s independent directors as to whether they are accepting Sillerman’s new buy-back offer.
