Wenzel v. Knight et al

Filing 34

MEMORANDUM OPINION. Signed by District Judge John A. Gibney, Jr. on 1/14/15. (jtho, )

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division DOROTHY WENZEL, on behalf of herself and all others similarly situated, Plaintiff, V. Civil Case No. 3:14-cv-432 GLADE M. KNIGHT, et al., Defendants. MEMORANDUM OPINION Two companies instituted programs through which their shareholders could reinvest their dividends in the company and receive additional shares. Dorothy Wenzel, a shareholder of one of those companies, brings this putative class action and alleges that the directors, managers, and advisors of those companies knew the price they charged for shares far exceeded their fair market value. She asks the Court to find that the directors and managers breached their fiduciary duties to shareholders and that the advisors hired to operate the companies aided and abetted those breaches while also negligently overvaluing the shares. The defendants filed this motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Wenzel brings three counts. Count I alleges a class claim against the Directors and Managers for breach of the fiduciary duty of care and loyalty to the A7 and A8 shareholders. Count I also includes a separate claim against A7 and A8's advisors, who Wenzel alleges aideed and abetted the fiduciary breach. Count II alleges a class claim against the Directors and Managers for breach of the fiduciary duty of loyalty and candor in the issuance of false and misleading materials to A7 and A8 shareholders. Finally, Count III alleges a claim against the three entities hired to advise A7 and AS for negligence and gross negligence.

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