Private equity firm investigated for breach of fiduciary duty

Private equity firm Platinum Equity LLC recently announced their intention to buy Multi-Color Corporation (NASDAQ: LABL). However, several legal bodies are investigating the acquisition.

Under the agreement, shareholders are entitled to $50 for each LABL share. However, some analysts estimate each share is worth $55. LABL also announced net revenue of 13 percent and overall positive estimates for 2019.

These discrepancies lead investigators to suspect if the LABL board conducted the acquisition fairly. If Platinum Equity undervalued the company or failed to disclose relevant information, the Board could have failed in their fiduciary duty by underpaying for shares and unlawfully harmed its shareholders.

What can you do if you have been defrauded?

If you own shares in LABL, you may want to explore your legal options. You might be able to recover your investments.

The U.S. Securities and Exchange Commission states that there are several different ways defrauded investors can recover injuries. The following are a few ways you can do this:

  • Receiverships
  • Fair funds and disgorgement funds
  • Brokerage account customer protections
  • Corporate bankruptcy proceedings
  • Private class action lawsuits

While they cannot bring criminal charges, in the cases they investigate the USSEC can sue alleged wrongdoers for violating the law. You can take any of the above action to be compensated in a USSEC lawsuit.

Analysts and advisors cannot guarantee that your investment will succeed. While every investment poses certain risks, that risk should not include the risk for criminal action. If you hold shares in a company that comes under investigation you may need to seek legal protection for your personal and business finances.


Devon A. Kinnard, Partner
339 Main Street
Worcester, Massachusetts