Randall Bearings, Inc. - Class and Derivative Action

Chimicles & Tikellis LLP was Plaintiff's counsel in a stockholder class and derivative action challenging an executive compensation plan that transferred over 30% of the equity and voting power of Randall Bearings, Inc. -- along with corresponding bonuses to cover taxes on the grants -- to certain executive insiders for total consideration of just $200.00.  Plaintiff’s Third Amended Class Action and Derivative Complaint (linked below) asserted that the directors breached their fiduciary duties to the Company and the public stockholders in designing and approving the plan and stock grants to entrench and enrich the insiders and failed to disclose the grant to plans to the stockholders voting whether to authorize the plan.  The complaint also alleged that the Company’s outside attorney and his firm aided and abetted the directors’ breaches.

In a forty-eight page opinion issued on January 23, 2007, the Delaware Court of Chancery denied, in its entirety, the director defendants’ motion to dismiss, ruled that any motion for summary judgment by Defendants would not succeed and directed the parties to complete discovery and proceed to trial.  On November 27, 2007, the Court issued a second opinion denying a motion to dismiss by the Company’s former outside attorney and his law firm.  Both opinions are accessible by clicking the links below.

On May 8, 2008, the parties finalized a settlement agreement to resolve the claims.  The Settlement Agreement and Exhibits are linked below.  The Settlement included, among other things, return and cancellation of all 200,000 shares issued to the executives, a cash fund in the amount of $2.45 million and signification prospective restrictions on executive stock plans.  The Court approved the Settlement on August 5, 2008.  The Final Order and Judgment is linked below.  The Settlement provided for a full recovery for the Company and the Class.