(CN) - Shareholders sued EDGAR Online over R.R. Donelley & Sons Co.'s plan to buyout the company for $1.09 per share.
"The Individual Defendants have knowingly and recklessly and in bad faith violated fiduciary duties of care, loyalty, good faith, and independence owed to the public shareholders of EDGAR and have acted to put their personal interests ahead of the interests of EDGAR shareholders," the complaint states.
According to the complaint, the offer is well below NASDAQ's 52 week high of $1.30.
Plaintiffs claim the sale will prevent them from reaping the benefits of EDGAR's two year investment and focus on its XBRL (eXtensible Business Reporting Language) software. Though the company reported losses associated with its focus on XBRL, financial data from the company's 2011 fourth quarter statement showed this was beginning to turn around.
"I am pleased to report that EDGAR Online experienced tremendous growth in 2011 . . . In addition to generating record revenues for the year, we implemented the infrastructure and added the human talent necessary to support future growth and product evolution. The value propositions embodied in our data and analytics products, disclosure management solutions, and software businesses position EDGAR Online to expand and gain market share," CEO Robert Farrell said in March 2012, according to the lawsuit.
In addition to the inadequate price, the board also agreed to a no solicitation provision and a $2.75 million termination fee.
The class is represented by Brian D. Long, Seth Rigrodsky and Gina Serra of Rigrodsky & Long in Wilmington, Del. and Eduard Korsinsky of Levi & Korsinsky LLP in New York.