Rural/Metro Ruling Gives Investors More Ammo To Fight Banks

Law360, New York (March 10, 2014, 4:52 PM EDT) -- A Delaware judge on Friday sided with shareholders who had contested advice given by RBC Capital Markets LLC in the 2011 private equity buyout of an ambulance operator, a decision experts say amplifies scrutiny on investment banks in the deal-making process and emboldens investors to challenge them in court.

Vice Chancellor J. Travis Laster ruled that RBC had guided Rural/Metro Corp. into a hasty sale to New York investment house Warburg Pincus LLC for a lowballed $438 million, in order to collect fees. The 92-page opinion...
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