Mann, Liebman and Flanagan Secure Complete Defense Verdict in $200 Million Class Action

April 24, 2023 Firm News

Partners Monte Mann and Joshua Liebman and Associate Ian Flanagan of Armstrong Teasdale’s new Chicago office just secured a complete defense verdict for private equity clients Siem Kapital AS, Harwood Capital LLP (f/k/a North Atlantic Value LLP) and Siem Industries Inc. in a class action shareholder dispute where plaintiffs were seeking over $200 million in damages. Mann, Liebman and Flanagan obtained this complete victory despite being retained just three months before trial.

In this nearly decade-old shareholder dispute, a class of minority members in a Delaware LLC that owned and operated an ethanol plant in Rochelle, Illinois, alleged they were improperly “squeezed out” of the company by the LLC’s majority member. The defendants included the four individual executive managers of the LLC who voted in favor of the supposed squeeze-out, the LLC’s majority member and its parent companies, as well the European private equity investors that had acquired the majority member shortly before the alleged squeeze out.

The lawsuit was originally filed in 2014 in Ogle County, Illinois. In 2018, the court entered summary judgment on liability for the plaintiffs and against the individual defendants, finding that the company executives had breached their fiduciary duties and the LLC’s operating agreement. The court then bifurcated the trial, deciding to determine the damages allegedly caused by the individual defendants before determining whether any of the corporate defendants were liable. In 2020, the plaintiffs and the individual defendants went to trial on the issue of damages arising out of the individual defendants’ liability, and the court awarded the plaintiffs over $10 million in damages (including prejudgment interest).

The corporate defendant case was set for trial in November 2022. Yet, just a few months before trial, in August 2022, the private equity investor defendants – Siem Kapital, Siem Industries and Harwood Capital – who were originally represented by an Am Law 15 firm, retained Mann and Liebman as their trial counsel to defend them against claims of aiding and abetting the individual defendants’ breaches of fiduciary duty and tortious interference with the LLC’s operating agreement.

At the November 2022 trial, in addition to joint liability for the $10 million award they already obtained against the individual defendants, the plaintiffs sought over $57 million in “consequential damages” and an unspecified amount – but likely at least three times their purported actual damages in punitive damages – based on the theory that the corporate defendants (including the private equity investor defendants) orchestrated the squeeze-out knowing it was wrong and illegal at the expense of the minority members who were primarily local farmers from in or around Ogle County.

Following an eight-day bench trial and a round of extensive closing briefs, the Court found that Armstrong Teasdale’s three clients were not liable on either of the claims. This was complete vindication for the private equity investor defendants who consistently maintained that they were not involved in determining the price or process of the minority buyout. The Court did find one other company, represented by a different law firm, jointly and severally liable with the individual defendants for over $10 million.

Contact Us
  • Worldwide
  • Boston, MA
  • Chicago, IL
  • Denver, CO
  • Dublin, Ireland
  • Edwardsville, IL
  • Jefferson City, MO
  • Kansas City, MO
  • Las Vegas, NV
  • London, England
  • Miami, FL
  • New York, NY
  • Orange County, CA
  • Philadelphia, PA
  • Princeton, NJ
  • Salt Lake City, UT
  • St. Louis, MO
  • Washington, D.C.
  • Wilmington, DE
abstract image of world map
Boston, MA
800 Boylston St.
30th Floor
Boston, MA 02199
Google Maps
Boston, Massachusetts
Chicago, IL
100 North Riverside Plaza
Suite 1500
Chicago, IL 60606-1520
Google Maps
Chicago, Illinois
Denver, CO
4643 S. Ulster St.
Suite 800
Denver, CO 80237
Google Maps
Denver, Colorado
Dublin, Ireland
Fitzwilliam Hall, Fitzwilliam Place
Dublin 2, Ireland
Google Maps
Edwardsville, IL
115 N. Second St.
Edwardsville, IL 62025
Google Maps
Edwardsville, Illinois
Jefferson City, MO
101 E. High St.
First Floor
Jefferson City, MO 65101
Google Maps
Jefferson City, Missouri
Kansas City, MO
2345 Grand Blvd.
Suite 1500
Kansas City, MO 64108
Google Maps
Kansas City, Missouri
Las Vegas, NV
7160 Rafael Rivera Way
Suite 320
Las Vegas, NV 89113
Google Maps
Las Vegas, Nevada
London, England
Royal College of Surgeons of England
38-43 Lincoln’s Inn Fields
London, WC2A 3PE
Google Maps
Miami, FL
355 Alhambra Circle
Suite 1250
Coral Gables, FL 33134
Google Maps
Photo of Miami, Florida
New York, NY
7 Times Square, 44th Floor
New York, NY 10036
Google Maps
New York City skyline
Orange County, CA
19800 MacArthur Boulevard
Suite 300
Irvine, CA 92612
Google Maps
Philadelphia, PA
2005 Market Street
29th Floor, One Commerce Square
Philadelphia, PA 19103
Google Maps
Philadelphia, Pennsylvania
Princeton, NJ
100 Overlook Center
Second Floor
Princeton, NJ 08540
Google Maps
Princeton, New Jersey
Salt Lake City, UT
222 South Main St.
Suite 1830
Salt Lake City, UT 84101
Google Maps
Salt Lake City, Utah
St. Louis, MO
7700 Forsyth Blvd.
Suite 1800
St. Louis, MO 63105
Google Maps
St. Louis, Missouri
Washington, D.C.
1050 Connecticut Avenue NW
Suite 500
Washington, DC 20036
Google Maps
Photo of Washington, D.C. with the Capitol in the foreground and Washington Monument in the background.
Wilmington, DE
1007 North Market Street
Wilmington, DE 19801
Google Maps
Wilmington, Delaware