Rottlund sued over attempt to go private. By Iris Richmond
Less than a week after The Rottlund Co. announced it will buy back its outstanding shares and take the company private, the home builder finds itself named in a lawsuit filed to stop the self-tender offer.
The plaintiff is James Biglan, a shareholder. He accuses the Rotter family, which owns about 69 percent of the outstanding shares, of using its majority control to squeeze out the minority shareholders for its own self-interest. He contends that the takeover breaches Rottlund's fiduciary duties to its stockholders in failing to take any steps to obtain the best price for the company's shareholders.
Biglan filed suit in Hennepin County District Court in Minneapolis, asking that the court certify the suit as a class action, enjoin the self-tender offer, and award damages in an amount not yet disclosed.
Rottlund says the litigation is "without merit" and that it will "vigorously defend against it." Rottlund was in the process of hiring an attorney as this issue went to press and would not comment.
The tender offer was made on Jan. 24 and was set to expire at midnight on Feb. 22, unless extended. Fleet National Bank was to finance the purchase at a price of $9 per share; Rottlund's stock closed at $7.75 per share on Jan. 18, the last trading day before the tender began. Upon completion of the tender, the stock would be delisted from the American Stock Exchange.
Rottlund had a 52-week high of $9.20 and a low of $4.50.
*Millions of Dollars
BIG BUILDER Magazine, March 2002