Class Action Launched Against Harman
There’s more bad news this week for Harman International: Less than two weeks after its $8 billion acquisition by two private equity firms fell apart, a New York law firm has commenced a class action suit against Harman, on behalf of investors.
According to Stull, Stull & Brody’s announcement of the action, Harman’s management “omitted or misrepresented material adverse facts about the Company’s financial condition, business prospects, and revenue expectations during the Class Period.” The class period, between April 26 and Sept. 27 of this year, represents the time between the announcement of Harman’s planned acquisition by Kohlberg Kravis Roberts and Goldman Capital Partners VI, and the cancellation of the deal.
In scuttling the deal, KKR and Goldman cited a “material adverse change” in Harman’s business. According to the class action, Harman breached the merger agreement, failed to disclose its inventory and R&D costs, as well as facts about its general financial health. The class action seeks damages on behalf of investors who purchased Harman stock during the period of the merger.