First Circuit revives investor suit against Roomba maker after Amazon buyout flop

(CN) — Judges in the First Circuit on Friday brought back shareholders’ lawsuit against the CEO and CFO of iRobot, Roomba’s parent company, accusing the leaders of hiding warning signs before a now-scrapped buyout by Amazon.

Amid signals of disapproval from the European Commission, the European Union’s antitrust regulator, Amazon in January 2024 ditched plans to buy iRobot for $1.4 billion. The commission cited anticompetitive and privacy issues with the deal, which was announced in 2022 and would have been one of Amazon’s largest acquisitions.

Investors led by the firm Premca Extra Income Fund saw their lawsuit dismissed last year, but a three-judge appellate panel revived claims against Colin Angle, former CEO of iRobot — which filed for bankruptcy in December 2025 — and Julie Zeiler, the company’s CFO, as they relate to an August 2023 modified proxy statement.

“"[T]he amended complaint plausibly alleges that an opinion expressed in iRobot’s modified proxy statement — namely, that the company expected regulatory approval for the merger — is actionable because it omitted important contrary information about European approval in circumstances that adequately suggest scienter,” U.S. Circuit Judge Seth R. Aframe, a Joe Biden appointee, wrote in the 42-page ruling.

Joining Aframe were U.S. Circuit Judges Julie G. Rikelman and Sandra L. Lynch, respective Biden and Bill Clinton appointees.

The panel otherwise affirmed the Boston federal court’s dismissal.

“We now conclude that the district court correctly dismissed the amended complaint for all statements identified by Premca except for the Aug. 24, 2023, modified proxy statement,” Aframe wrote.

In the lower court, U.S. District Judge William G. Young found the plaintiffs failed to sufficiently establish inferences that iRobot expected the Amazon merger to fail. Even if iRobot’s agents made misleading statements, the investment firm could not show they did so knowingly, the Ronald Reagan appointee ruled.

The investors argued on appeal that the lower court should not have disregarded accounts from confidential witnesses in “high-level positions with firsthand knowledge” supporting their claims that Amazon refused to cooperate with European antitrust regulators’ requests for information.

Premca holds that iRobot and Amazon internally pivoted away from the merger starting in the summer of 2023, but did not disclose that turn of events to investors.

“They terminated all nine tracks of integration planning meetings between the companies, and iRobot shifted to planning to operate independently instead of as a merged company,” iRobot argued in its brief. “Throughout the remainder of the class period, defendants hid those facts from investors, making their statements so incomplete as to mislead, and even affirmatively misrepresented that Amazon was cooperating with regulators, despite knowing otherwise.”

For its part, iRobot argued that it announced the merger but also warned investors that regulatory approval was not guaranteed, then provided tailored and updated disclosures about the Federal Trade Commission’s and European Commission’s reviews.

Following oral arguments last September, the Bedford, Massachusetts-based iRobot entered Chapter 11 bankruptcy, which resulted in a temporary stay of the appeal. The appellate court then granted the parties’ joint request to dismiss iRobot from the appeal but proceed against Angle and Zeiler.

Neither iRobot nor the plaintiff’s attorney immediately returned requests for comment.

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