(CN) - Shareholders claim EMAK Worldwide CEO James Holbrook drove "one of the best marketing services agencies in the world to the brink of financial ruin," costing them $100 million, and rejecting a buyout offer of $15 per share before the price sank as low as 8 cents.
Plaintiffs, led by Take Back EMAK, include majority shareholder Donald Kurz, who says Holbrook and a complicit board turned a once lucrative business into a "nearly worthless penny stock."
According to the Los Angeles Superior Court complaint, a "conflicted, inattentive and overly deferential board focused on catering to a bullying preferred shareholder, protecting their own self-interest and bending over backwards to enable an overpaid, underperforming and untrustworthy CEO, chairman and outside lawyer to milk the company coffers for as long as possible."
The plaintiffs say Holbrook and the board displayed "extraordinary ineptitude" when they refused a buyout offer of $15 per share and then "relentlessly pounded" the share price down to "a recent record low of $0.08 per share, obliterating an incredible 99 percent of the market value of the company," which has been delisted from the NASDAQ.
And they claim that "the recent uptick in the company's share price exists only because the board has unlawfully concealed the loss of its largest client [Burger King] from the public."
Plaintiffs, which include Trinidad Capital Master Fund, and Sems Diversified Value, demand $100 million in compensatory damages and $300 million in punitive damages.
They are represented by John Kirkland with Luce Forward.
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