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Komfie Manalo, Opalesque Asia: Carl Grimstad, the founder and former CEO of iPayment Holdings, and Corrib Capital Management L.P. have sued iPayment debtholders Chatham Asset Management, AllianceBernstein, and Leon Cooperman's Omega Associates, along with certain members of the iPayment Board of Directors appointed by the debtholders, for allegedly pursuing an "illegal scheme" to steal the Company away from equity holders by deliberately "depress[ing] the value of the company's shares" in order to "set them up to convert their outstanding debt securities into equity and seize permanent control over the Company at an artificially depressed price."
The suit, which alleges the defendants breached their fiduciary duty, was filed in Delaware Chancery Court.
The lawsuit alleges that when the company's financial advisor, J.P. Morgan, and counsel, Latham & Watkins LLP, warned that the scheme would constitute a breach of fiduciary duty, the board, at the direction of Chatham, AllianceBernstein and Omega, fired them.
It added that in pursuing their scheme, Chatham, AllianceBernstein and Omega have, among other things, derailed efforts to refinance a credit facility that matures next year, which has placed the company at the risk of default and has caused the Company's auditor to refuse to certify iPayment’s financial statements; appointed individuals to serve on the board of directors -- including their own employees -- wh...................... To view our full article Click here
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