$65M Lending Co. Sale Tainted By Conflict, Chancery Told

Law360 (January 10, 2019, 7:54 PM EST) -- Public stockholders of student and specialty lender First Marblehead Corp. challenged the company's roughly $65 million go-private sale in Delaware's Chancery Court on Wednesday, alleging the 2016 deal was steered by a conflicted controlling group to a company owned by First Marblehead's second-largest stockholder.

The suit, led by public stockholder Miguel Massari, accused company co-founder, director and board chairman Daniel Meyers and other directors and parties of multiple breaches of fiduciary duties to the company during events leading up to the the $5.05-per-share sale in August 2016.

"In selling the company, the individual defendants failed to take reasonable efforts to maximize...

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