A federal judge has dismissed a lawsuit filed by a group of Cooper Tire & Rubber Co. shareholders that alleged company officials had not been honest about the risks of a US$2.5 billion 2013 merger agreement that ultimately fell apart.
The class action suit, which was filed in early 2014, argued that Cooper Tire and its top company officials had violated federal securities laws. The suit states officials omitted or misrepresented facts that would have shown the proposed merger with Apollo Tyres Ltd. was imperiled from the start. A common theme among the allegations was that Cooper Tire officials knew ahead of time that it was likely the company’s Chinese joint venture partners would object to the deal and attempt to torpedo it, and that they were trying only to enrich themselves.
Attorneys for Cooper Tire denied the allegations and asked the court to dismiss the case in March.
In a decision posted July 1, U.S. District Court Judge Richard Andrews, finding Cooper Tire had followed federal and state financial laws and didn’t attempt to hide or misrepresent the deal’s potential risks, rejected all of the plaintiffs claims and dismissed the case.
In a statement, Cooper said it was pleased by the ruling.
“The court’s decision is vindication for the company and the executives named in the lawsuit, which have maintained since this case began that no fraud had taken place in connection with this matter,” the company said. “We are pleased to put this behind us as we continue to focus on our business and meeting the needs of our customers.”
The merger was called off at the end of 2013. – Toledo Blade