Rubicon

[drcjp]

Found this, not a pretty read, but even I can understand it.

Ten current and former workers at Summerville-based biotechnology firm ArborGen Inc. won a $53.5 million judgment against their employer and some of the nation’s top forest products companies after a judge ruled the companies tricked workers into accepting incentive plan changes that depleted most of their wealth.
Judge Edgar Dickson also entered judgments against International Paper, MeadWestvaco — now WestRock — and New Zealand-based Rubicon Inc., as well as some of those forestry companies’ board members, following a trial in Dorchester County that lasted nearly three weeks.
The trial was held in January and Dickson’s final decision was issued last week. Rubicon has said it will “vigorously appeal” the ruling. It is not clear if the other companies plan to appeal the Dec. 22 judgment. A lawyer representing those companies and their board members could not be reached for comment Tuesday.

ArborGen, which develops seedlings that sprout into fast-growing trees for the forestry industry, was formed in February 2000 when the biotech divisions of MeadWestvaco, IP and Rubicon were combined. The workers who filed the lawsuit were employees of IP or MeadWestvaco and later ArborGen.
According to the lawsuit, the employees were led to believe that they were getting potentially lucrative options in their compensation packages allowing them to share in the future growth of ArborGen, which was valued at $100 million shortly after its formation.
As ArborGen began to grow, the lawsuit alleged, the company’s board members decided the compensation package was giving the employees too much money.
“The defendants orchestrated a scheme to switch the option plans given to the employees, diluting the value of the original option plan,” according to a statement from Chip Bruorton, a lawyer with Rosen Hagood who represented the workers.
Bruorton said changes to the incentive plan were “introduced to the employees with false information, misrepresentations and concealment as part of a wrongful scheme to defraud them of their rights in the plan.”
When ArborGen was converted to a C-corporation — that is, a corporation that is taxed separately from its ownership firms — the company’s value was $650 million.
According to the lawsuit, the workers claimed they should have been given incentives based on the $550 million in growth ArborGen experienced since its formation, “but the defendants failed to provide the employees with the value they were entitled to.”
An affidavit by Steve Pomerantz, an investment management expert, showed the 10 employees should have received a combined $11.3 million of equity in the new ArborGen C-corporation. Instead, they were given a combined $414,330 of equity based on the revised plan that was created when ArborGen’s growth took off.
The $53.5 million judgment handed down last week also includes interest and punitive damages.
Dickson, the circuit judge, said in his ruling that the employees “were abused by ArborGen, its founders, its board members and its management. ... In not honoring the contracts, the defendants acted with a lack of honesty and integrity.”
Bruorton said in a statement that he is happy with the outcome.
“The court took a great deal of time and effort to understand the facts of this case and made a decision that is supported by the evidence presented. My clients were wronged, and I’m happy that their rights have been vindicated.”

Leaves me wondering just what Arborgen is worth, if anything.
Also consider after reading that, that Arborgen et al may be penalised even more if they do not settle quickly; I really wonder if they have anything much to settle with...so have to delay(and pick up CEO/Directors' fees along the way)
Would you lend the CEOs NZ80 mill to pay off such a settlement??

Poor old Hugh Fletcher eh? First this and then his cattle are caught peeing in Lake Taylor in Nth Canterbury. Not a good 2016 so far.

[biker]

Found this, not a pretty read, but even I can understand it.

Ten current and former workers at Summerville-based biotechnology firm ArborGen Inc. won a $53.5 million judgment against their employer and some of the nation’s top forest products companies after a judge ruled the companies tricked workers into accepting incentive plan changes that depleted most of their wealth.
Judge Edgar Dickson also entered judgments against International Paper, MeadWestvaco — now WestRock — and New Zealand-based Rubicon Inc., as well as some of those forestry companies’ board members, following a trial in Dorchester County that lasted nearly three weeks.
The trial was held in January and Dickson’s final decision was issued last week. Rubicon has said it will “vigorously appeal” the ruling. It is not clear if the other companies plan to appeal the Dec. 22 judgment. A lawyer representing those companies and their board members could not be reached for comment Tuesday.

ArborGen, which develops seedlings that sprout into fast-growing trees for the forestry industry, was formed in February 2000 when the biotech divisions of MeadWestvaco, IP and Rubicon were combined. The workers who filed the lawsuit were employees of IP or MeadWestvaco and later ArborGen.
According to the lawsuit, the employees were led to believe that they were getting potentially lucrative options in their compensation packages allowing them to share in the future growth of ArborGen, which was valued at $100 million shortly after its formation.
As ArborGen began to grow, the lawsuit alleged, the company’s board members decided the compensation package was giving the employees too much money.
“The defendants orchestrated a scheme to switch the option plans given to the employees, diluting the value of the original option plan,” according to a statement from Chip Bruorton, a lawyer with Rosen Hagood who represented the workers.
Bruorton said changes to the incentive plan were “introduced to the employees with false information, misrepresentations and concealment as part of a wrongful scheme to defraud them of their rights in the plan.”
When ArborGen was converted to a C-corporation — that is, a corporation that is taxed separately from its ownership firms — the company’s value was $650 million.
According to the lawsuit, the workers claimed they should have been given incentives based on the $550 million in growth ArborGen experienced since its formation, “but the defendants failed to provide the employees with the value they were entitled to.”
An affidavit by Steve Pomerantz, an investment management expert, showed the 10 employees should have received a combined $11.3 million of equity in the new ArborGen C-corporation. Instead, they were given a combined $414,330 of equity based on the revised plan that was created when ArborGen’s growth took off.
The $53.5 million judgment handed down last week also includes interest and punitive damages.
Dickson, the circuit judge, said in his ruling that the employees “were abused by ArborGen, its founders, its board members and its management. ... In not honoring the contracts, the defendants acted with a lack of honesty and integrity.”
Bruorton said in a statement that he is happy with the outcome.
“The court took a great deal of time and effort to understand the facts of this case and made a decision that is supported by the evidence presented. My clients were wronged, and I’m happy that their rights have been vindicated.”

Leaves me wondering just what Arborgen is worth, if anything.
Also consider after reading that, that Arborgen et al may be penalised even more if they do not settle quickly; I really wonder if they have anything much to settle with...so have to delay(and pick up CEO/Directors' fees along the way)
Would you lend the CEOs NZ80 mill to pay off such a settlement??

This is now really quite an old story. It also only reflects the view of the plaintiffs and contains no balancing view from the defendants. There is a little bit more to this story than meets the eye and my view is it will play out before too long and may be alongside the result of the Tenon strategic review which I guess is not that far away.
Also the amount of the judgement is extreme and under appeal could be severely reduced.
I'm sure all parties involved are aware of this.

[ari]

24March 2016 - Rubicon announced today that the South Carolina Court presiding over the
ArborGen employee litigation has granted the defendants' (i.e. ArborGen, International
Paper, MeadWestvaco, Rubicon, and their current and former representatives) motion to
alter / amend the judgment in this matter. The Court has dismissed the litigation, and
vacated in its entirety its prior US$53 million order in favour of the plaintiffs (i.e. it is null and
void, and of no effect), and the parties to the litigation have agreed a confidential settlement
arrangement, which brings this matter to a final conclusion. The net financial cost to Rubicon
of that settlement is immaterial, and as far as Rubicon and its investment in ArborGen are
concerned, there is no further financial impact from this lawsuit.
As the settlement terms are confidential to all parties, there will be no further comment on
the matter.

[ari]

Finally heading in the right direction.....31.8% lift is impressive.

[biker]

This is now really quite an old story. It also only reflects the view of the plaintiffs and contains no balancing view from the defendants. There is a little bit more to this story than meets the eye and my view is it will play out before too long and may be alongside the result of the Tenon strategic review which I guess is not that far away.
Also the amount of the judgement is extreme and under appeal could be severely reduced.
I'm sure all parties involved are aware of this.

Default
24March 2016 - Rubicon announced today that the South Carolina Court presiding over the
ArborGen employee litigation has granted the defendants' (i.e. ArborGen, International
Paper, MeadWestvaco, Rubicon, and their current and former representatives) motion to
alter / amend the judgment in this matter. The Court has dismissed the litigation, and
vacated in its entirety its prior US$53 million order in favour of the plaintiffs (i.e. it is null and
void, and of no effect), and the parties to the litigation have agreed a confidential settlement
arrangement, which brings this matter to a final conclusion. The net financial cost to Rubicon
of that settlement is immaterial, and as far as Rubicon and its investment in ArborGen are
concerned, there is no further financial impact from this lawsuit.
As the settlement terms are confidential to all parties, there will be no further comment on
the matter.



What an absolutely stunning result!!
Tenon strategic review results not far away and a review of Arborgen capital requirements v shareholder return in progress IMO means that finally, as Julius Caesar uttered the famous phrase "alea iacta est"—the die is cast—as his army marched and crossed the Rubicon.
The next few months may well be, and finally, defining ones for RBC.
At 28c IMO RBC is still hugely under valued but I'm holding a few so I'm biased.

[ari]

[QUOTE

What an absolutely stunning result!!
Tenon strategic review results not far away and a review of Arborgen capital requirements v shareholder return in progress IMO means that finally, as Julius Caesar uttered the famous phrase "alea iacta est"—the die is cast—as his army marched and crossed the Rubicon.
The next few months may well be, and finally, defining ones for RBC.
At 28c IMO RBC is still hugely under valued but I'm holding a few so I'm biased.[/QUOTE]

It's been along wait Biker......I have a hefty holding so am pleased, but kicking myself at the same time as I attempted to buy 50,000 earlier in the week @ 21c....too stubborn to move the goalposts.....

[biker]

[QUOTE

What an absolutely stunning result!!
Tenon strategic review results not far away and a review of Arborgen capital requirements v shareholder return in progress IMO means that finally, as Julius Caesar uttered the famous phrase "alea iacta est"—the die is cast—as his army marched and crossed the Rubicon.
The next few months may well be, and finally, defining ones for RBC.
At 28c IMO RBC is still hugely under valued but I'm holding a few so I'm biased.

It's been along wait Biker......I have a hefty holding so am pleased, but kicking myself at the same time as I attempted to buy 50,000 earlier in the week @ 21c....too stubborn to move the goalposts.....[/QUOTE]

Sure has Ari.
I'm wondering if Rubicon will even exist by the end of the year.

[ari]

You may be right biker...anything above Edison's conservative value of 64c in April 2015 would clear my cost of 55c, but their more bullish value of $1.06 would be nice way to go out!

[biker]

You may be right biker...anything above Edison's conservative value of 64c in April 2015 would clear my cost of 55c, but their more bullish value of $1.06 would be nice way to go out!

I think the value is there ari it's whether or not it can be extracted and returned to us that remains to be seen. Certainly something beyond your 55c shouldn't be a problem. I need to see 29c to clear but haven't hung in there this long not to see possibly 3 times that.

[biker]

Tim Hunter from the NBR must have choked while he was writing this after his previous vitriolic article condemning Luke Moriarty et al.

Rubicon settles US lawsuit
TIM HUNTER THURSDAY MARCH 24, 2016 5
SHARE

Investment company Rubicon [NZX: RBC] has settled a lawsuit in the United States, ending a $US53 million claim against the company and several other parties including its chief executive Luke Moriarty.