NEW YORK, March 17, 2017 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Patriot National, Inc. (“Patriot National” or the “Company”) (NYSE: PN ) in the United States District Court for the Southern District of New York on behalf of a class consisting of investors who purchased or otherwise acquired Patriot National stock on the open market from August 15, 2016 and March 3, 2017, inclusive (the “Class Period”), seeking to recover compensable damages caused by Defendants’ violations of the Securities Exchange Act of 1934.
The Complaint alleges that on August 15, 2016, Patriot National confirmed that the special committee of its board of directors was working with Ebix, Inc. to possibly combine the two businesses. Then, on November 8, 2016, Patriot National announced that it was rejecting a $475 million proposal from Ebix. In a subsequent conference call with analysts, Steven M. Mariano, Chief Executive Officer of Patriot National, stated that the Ebix transaction was rejected because the Company had a better offer from someone else. However, the Complaint alleges that Patriot National officials failed to disclose that the special committee was beholden to Mariano, was operating for the benefit of Mariano, did not independently assess the merits of the Ebix transaction, and was not exploring strategic alternatives to maximize shareholder value.
On March 3, 2017, Patriot National disclosed that it entered into an agreement with Guarantee Insurance Group (“GIG”) and Mariano, majority owner of both Patriot National and GIG, regarding the service agreements between the company and GIG’s wholly-owned subsidiary Guarantee Insurance Company. Under the agreement, the Company paid GIG $30 million. The company further disclosed that “[a]s further material inducements for the company’s payment,” GIG and Mariano agreed to a series of corporate and financial covenants, including that the Company would not enter into any transaction with an affiliate of Mariano without the prior approval of a majority of independent directors. On this news, Patriot National’s stock fell $0.72 per share, or 16.4%, to close at $3.67 per share on March 6, 2017, and continued to decline in the following days, closing at $3.01 per share on March 8, 2017.
If you wish to serve as lead plaintiff, you must move the Court no later than May 15, 2017 . A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com .
Please visit our website at http://www.gme-law.com for more information about the firm.
