Vita Foods board members lawsuit dismissed
An American circuit court judge has dismissed the lawsuit alleging a breach of fiduciary duty by members of the board of directors of American seafood and gourmet sauce and condiment distributor Vita Foods Products.
Chicago-based law firm Much Shelist announced the decision, dismissing the suit filed by a group of undisclosed shareholders led by Stephen Rubin, the company's former chairman and CEO, against board members Howard Bedford, Clifford Bolen, David Lipson, Edward Dolanski, Robert Douglas II and David Allen.
According to Much Shelist, the suit stems from the company's attempt to recover from "substantial financial losses," starting about 10 years ago. In 2008, Bedford presented a plan to take the company private, offering the board shares of his own and Rubin's for USD 0.30 per share.
"During the evaluation process, Rubin withdrew his participation in the effort to take Vita Foods private, and he and the remaining shareholders sold their shares for USD 1.05 per share," Much Shelist said.
The lawsuit alleged the named board members did not make "reasonable efforts to secure the highest price realistically available given the market value of the company at the time."
The judge, in the Circuit Court of Illinois' Cook County, ruled in favor of the six board members after the initial case was dismissed in U.S. District Court for the Northern District of Illinois.
"The defendants fulfilled their fiduciary duty in this case," said Steven P. Blonder, lead counsel for the board members and a principal at Much Shelist. "Not only did these directors ensure an independent analysis of the buyout, they also undertook a reasonable effort to secure the highest possible price for the company at the time. This is a solid victory for a group of distinguished and seasoned business leaders."