15-Jun-2016 Source: HeliHub.com
Erickson Inc. and the private equity company that controls it, have reportedly agreed to pay $18.5 million to settle a shareholder’s class-action lawsuit, according to court documents researched by the Oregonian newspaper.
The lawsuit was led by Edward Montgomery, an Erickson pilot and shareholder, after a significant drop in the Erickson share price after the company’s acquisition in 2013 of Evergreen Helicopters. The chairman of Erickson at the time was Quinn Morgan, who also headed up ZM Private Equity, the company’s largest shareholder. ZM was owed $62 Million by Evergreen and Montgomery claimed that ZM received all that money “by using Erickson for their own personal benefit to the detriment of Erickson’s minority stockholders”.
The court papers show a settlement of $18.5 million will be shared between shareholders who held Erickson shares between March 18, 2013 and June 16. Also included are new limits on Erickson’s ability to conduct major corporate purchases or sales, particularly transactions that involve ZM. Erickson will have to get approval of a committee of independent Erickson boardmembers before it moves ahead, according to the settlement document. The settlement still needs approval by a judge, which will not happen for a few months yet, and the amount is nowhere near the losses suffered by shareholders
Erickson’s share price peaked in 2013 $28.10. The highest price it has been in 2016 is $2.28, and it closed last night at 70 cents
In the year to 31st December 2012, the company made a profit before tax of $26M on turnover of $180M
In the year to 31st December 2015, the company made a loss before tax of $87M on turnover of $297M, partly due to the debt burden taken on in acquiring Evergreen. These accounts also show an accumulated deficit of almost $85 Million.
Last week Erickson announced it had hired Imperial Capital “to explore strategic alternatives for the Company”.
Jeremy Parkin – HeliHub.com