CDI Corp. Hit with Securities Lawsuit Regarding Proposed Merger

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A CDI Corp. stockholder has filed suit against the company and its board of directors over allegations that it violated the Securities Exchange Act of 1934.

The lawsuit claims the company issued a misleading Registration Statement in connection with a merger between CDI and affiliates of AE Industrial Partners, LLC (AEI). According to the complaint, the Registration Statement was missing information concerning the company’s financial projections, the valuation analyses performed by its financial advisor, potential conflicts of interest of involved parties, and the background of the sale process. More specifically, the plaintiff claims the Registration Statement neglected to mention whether Houlihan Lokey Capital, the company’s financial advisor, had performed services for AEI or its related entities in the past.

The suit further notes that one of the individual defendants, a CDI director, is also a senior partner at the law firm that advised the company regarding the merger. It claims the Registration Statement failed to disclose whether he had provided legal advice or how his firm had become engaged in the transaction.

Finally, the plaintiff says he and other shareholders are entitled to allegedly missing information concerning potential provisions of non-disclosure agreements that may have prevented other interested parties from proposing superior offers for the company.