BlackBerry

Good Technology Sues Investors Challenging $425M BlackBerry Acquisition

Good Technology sued its former CEO and several venture capital investors Thursday in an attempt to thwart their efforts in seeking to block the $425 million acquisition by BlackBerry, telling a Delaware court the investors are contractually obligated to back the deal.

Good Technology’s lawsuit came just one day before the cash deal’s scheduled Friday closing date, and claims former Good Technology CEO Brian Bogosian and other shareholders have breached a 2013 voting agreement by failing to sign written consents to the deal and then filing suit to exercise their appraisal rights.

Filed in Delaware’s Court of Chancery, the suit seeks a declaration the protests are unlawful and injunctive relief forcing delivery of the written consents and joinder agreements.

In addition to Bogosian, who served at the company helm from 2000 to 2013 and owns just shy of 10 million shares, the lawsuit also names as defendants Harvest Growth Capital LLC, Harvest Growth Capital II LLC, Saturn Partners LP III and SPLP II Opportunity LP.

Under the merger, Good Technology would merge with BlackBerry’s subsidiary Greenbrier Merger Corp. to become a separate, wholly owned and controlled subsidiary of the mobile phone company.

According to the investors’ suit, the BlackBerry deal is being driven solely by the self-interests of several venture capital firms that control Good Technology and its board, namely Oak Investment Partners, Draper Fisher Jurvetson, Riverwood Capital, Lazard Technology Partners and Rustic Canyon Partners, which hold most of Good Technology’s preferred stock.

Moreover, Good Technology has turned down better offers in the past year, including one for $825 million, nearly double BlackBerry’s offer, their suit said. The investors claim that instead of pushing a deal that maximized value for common stockholders, Good Technology Chairwoman and CEO Christy Wyatt pushed for a “retention plan” so that she and her management team could be guaranteed millions of dollars in cash after the BlackBerry deal is consummated.

After debt and other expenses, the BlackBerry deal would give about $40 million to common stockholders while the preferred stockholders would receive approximately $250 million, $165.4 million of which would wind up in the pockets of the venture capital firms. Six of nine directors on Good Technology’s board are managing directors or founders of the venture capital firms, the investors said.

Seperately, Good Technology officially withdrew its plans for an initial public offering on Friday.

Via

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