LOS ANGELES (CN) – Shareholders of PeopleSupport, a customer service outsourcing company, filed a $250 million class action charging company insiders with selling the company on the cheap at shareholders’ expense.
Plaintiffs say PeopleSupport’s board of directors sold the company to the Indian company Essar Services and its subsidiary Easter Merger Sub at a rock bottom $12.25 per share.
The plaintiffs cite a PeopleSupport press release stating that the share price represents “a premium of approximately 42% over the weighted average trading price of the Company’s shares during the previous 30 trading days.”
The plaintiffs say PeopleSupport filed a deficient preliminary proxy with the Securities Exchange Commission that paints too vague a picture of the sale process.
But one thing is clear, the lawsuit claims: the deal will work out nicely for PeopleSupport’s senior management. For instance, CEO Lance Rosenzweig will keep his salary and score a $1 million cash bonus.
The Plaintiffs seek an injunction to stop the sale, plus damages, accounting and costs. They are represented in Superior Court by David Bower and James Lo with Levi & Korsinsky.