SmileDirectClub Sued In Del. Over Insider Gains On $1.3B IPO

Law360 (November 22, 2019, 9:02 PM EST) -- A SmileDirectClub investor sued the company’s directors in Delaware's Chancery Court late Friday, seeking damages over the alleged use of nearly $700 million in proceeds from a $1.3 billion initial public offering to buy up mostly insider-held, pre-IPO company securities just before the new stock started a nose-dive.

The derivative suit by the Doris Shenwick Trust sought damages on the company’s behalf from nine directors for breaches of fiduciary duty and unjust enrichment in connection with six directors' sale of pre-IPO stock and LLC units to the company. SmileDirectClub purchased the securities at the full $21.85-per-share, after-cost IPO price on Sept....

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