Kenneth Cole Under Investigation for Possible Breach of Fiduciary Duty
Posted on Jan 01, 2016
An independent firm is looking into the recent filings by Kenneth Cole to purchase the remaining shares of his company Kenneth Cole Productions. Cole already owns 47% of the stock, holding about 89% of the voting power for the company. The investigation will seek to determine whether or not the intended purchase price of shares in the company is set at a fair price for the stockholders.
The sale of the remaining shares is set for $15 each, but some analysts set the price at around $16.50. The independent investigation will take into consideration the value of the company currently set at approximately $280 million. If the investigation determines that Cole is negotiating too low of a price for the shares, he may be in a breach of duty to the share holders.
Cole is currently the Chairman and Chief Creative Officer for the company and has made it clear that he is not interested in negotiating his offer for the remaining shares, and has no interest in approving the sale of the shares to an outside investor. His substantial voting power puts him in a strong decision making position, but that could also put him at a higher risk of violating the fiduciary duty to the company’s other stockholders.
Owners of stock in a company deserve to have their best interests defended by the company’s executive officers. If you have questions or concerns about the fiduciary duty of a company’s owner or board of directors, you deserve to speak with a New York breach of fiduciary duty attorney who can get those questions answered. Contact The Law Offices of Jonathan M. Cooper for a free consultation, and order their book 3 Reasons That Your Employment Agreement May Not Be Worth The Paper It's Printed On.