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Friday, February 23, 2024 | Back issues
Courthouse News Service Courthouse News Service

Stockman, Heartland Face Class Action

ANN ARBOR (CN) - Shareholders claim Metaldyne cheated them when the company was acquired by Asahi Tec Corp. Among the defendants in this federal class action are Heartland Industrial Partners, a private equity firm, and its founding partner David Stockman.

Plaintiffs claim Metaldyne and its directors defrauded them by disseminating false and misleading statements. They claim that "The scheme: (i) deceived the Plaintiffs and Class members regarding Metaldyne's business, operations and management and the intrinsic value of Metaldyne common stock; (ii) was intended to enable Heartland and the Individual Defendants to preserve more cash in connection with controlling Metaldyne and eventually, to sell their Metaldyne common stock for their personal gain at artificially inflated prices; (iii) caused Plaintiffs and members of the Class to purchase Metaldyne common stock at artificially inflated prices and/or to forcedly sell their common stock for forcedly less than the company had projected or the $20-$25 'strike price' that had been periodically announced by the Individual Defendants since the date of Heartland's acquisition in 2000."

Plaintiffs are represented by R. Jay Hardin with Smith Haughey & Rice of Traverse City, Mich.

In a separate case, last week federal prosecutors in New York dropped fraud charges against Stockman, President Reagan's former budget director and the former CEO of Collins & Aikman, an auto parts maker. Five days after Stockman resigned as Collins & Aikman's CEO, the company collapsed.

Stockman made national news when, while still serving as Reagan's budget director, he told William Greider, a reporter for The Atlantic, that Reagan's budget numbers were "premised on faith," and that "None of us really understands what's going on with all these numbers."

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