RTI, Investor Pay $5.5M to Settle Suit
In a class-action settlement reached last week, Eagan-based Restaurant Technologies, Inc. (RTI) and Parthenon Capital, LLC, agreed to give RTI shareholders at least $5.5 million for shortchanging them during the 2009 recapitalization of the company.
The settlement, which was reached through mediation, also gives shareholders additional money in the event that RTI is sold before June 1, 2013, for an amount in excess of $170 million. The class-action suit includes about 350 shareholders and option holders of RTI.
According to the original complaint, which was filed on June 22, 2009, in Dakota County District Court, Parthenon Capital invested in RTI and gained several of the company's board seats in 2001.
Then, in 2004, Parthenon and Baltimore-based ABS Capital Partners purchased a majority stake in RTI-giving them a majority of the company's board seats and allowing them to bring in a new management team-and initiated a merger/recapitalization.
The suit alleges that the board's 2009 recapitalization was designed to wipe out the interests of common shareholders, option holders, and to cram down the interests of certain holders of preferred stock to benefit RTI's board and management-thereby breaching their fiduciary duties.
Shareholders also claim that proxy materials used in RTI's 2009 recapitalization contained false and misleading statements and failed to properly advise RTI shareholders of their ability to pursue certain appraisal rights.
Although the settlement was approved by a judge and class representatives-the shareholders who initially filed the suit-a hearing has been scheduled for November 29 to determine whether the proposed settlement is fair, reasonable, adequate, and in the best interests of the whole class.
If the settlement is approved, shareholders will split the $5.5 million based on the number of shares owned, minus court fees and other costs associated with litigation.
RTI provides bulk-cooking oil management to restaurants and picks up and recycles used oil. Some of the companies that RTI has contracts with are McDonald's, Burger King, Jack in the Box, McCormick & Schmick's, and Chili's.