Lead plaintiff Mark Gronkiewicz sued the Carrollton-based company, its board of directors, and The Evergreen Group Ventures LLC in Dallas County Court on Thursday.
He says Heelys and Evergreen entered into the asset and purchase agreement in October.
"Plaintiff brings this class action against Heelys' board of directors for their breaches of fiduciary duties arising out of their attempt to sell the company's assets to Evergreen by means of an unfair process, for an unfair price and without material information necessary for Heely's stockholders to determine whether or not to vote in favor of Proposal 1," the 18-page complaint states.
"The consideration offered for the proposed transaction fails to reflect the true value of company assets, given the company's prior successful trading history."
Heelys estimates shareholders will receive up to $2.37 per share of common stock in distributions after the sale, according to the complaint. But the plaintiff says Heelys shares were trading as high as $2.60 per share in April, which is "notably" more than the price offered by Evergreen.
"The consideration offered to Heely's public stockholders in the proposed transaction is unfair and grossly inadequate because, among other things, the intrinsic value of Heely's common stock is materially in excess of the amount offered for those securities in the proposed transaction," the complaint states.
The plaintiff alleges the deal is unfair because the defendants agreed to terms that discourage competing bids, including a "no solicitation" provision that bans the board from soliciting other buyers and forced it to terminate any on-going discussions with other buyers.
"In addition to the 'no shop' and matching rights provisions, the purchase agreement includes an unreasonable termination fee of 4.25 percent of any consideration received as a result of a superior proposal," the complaint states. "This will all but ensure that no competing offer will be forthcoming."
The plaintiff also alleges the company's recommendation statement is materially misleading and incomplete, that it fails to disclose the 53 potential buyers identified by non-party Roth Capital Partners LLC that were presented to the board in July. In particular, the plaintiff says the defendants failed to disclose the outcome of "preliminary indications of interest" by two parties referenced in the proxy materials.
"This information, which bears directly on the process undertaken by the board and the fairness of the consideration offered by the Heelys' shareholders, is material," the complaint states. "The omission of this information regarding the process and consideration obtained renders all statements pertaining to the board's belief that the proposed transaction provides a better opportunity to the company's shareholders than any alternatives available misleading."
The proposed class seeks declaratory and injunctive relief for breach of fiduciary duty, aiding and abetting. They are represented by Balon Bradley of Dallas.