Debt Firm's Owners Sued Over Alleged Control Gambit

Law360 (November 8, 2019, 8:07 PM EST) -- Asta Funding Inc.’s controlling stakeholders have been hit with a derivative suit in Delaware Chancery Court claiming they drained the company’s cash in a gambit to seize control and keep an activist hedge fund investor at bay.

In a partially redacted complaint filed Monday and unsealed Thursday, shareholder Daniel Litten targeted Asta Chairman and CEO Gary Stern and his son, Ricky Stern, for their $55 million purchase of shares held by Mangrove Partners, which had sought to probe the New Jersey-based company’s internal controls and install independent board members. The Sterns then profited from an unusual special dividend they declared after...

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