MoneyGram International, Inc.
Robbins Umeda LLP Announces an Investigation of MoneyGram International, Inc. for Shareholders
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at MoneyGram International, Inc. MoneyGram provides global money transfer and bill payment services. The company was founded in 1926 and is headquartered in Dallas, Texas.
Robbins Umeda LLP’s investigation focuses on whether the directors and officers and controlling stockholders of MoneyGram harmed the company by entering into a recapitalization agreement with affiliates of Thomas H. Lee Partners LP and Goldman Sachs Group Inc. Pursuant to the recapitalization, the controlling stockholders of MoneyGram will convert their preferred stock and receive $218.3 million in cash and $109.2 million in additional stock in excess of their contractual conversion preferences. This will enable the controlling stockholders to cash out approximately 28.7% of their $760 million cash investment, while increasing their percentage ownership of the company’s fully diluted equity. As such, the common shareholders will suffer cash value and voting power dilution. Moreover, the special committee appointed by MoneyGram’s board of directors may have failed to act independently and may have been guided by a conflicted and uninformed advisor. Moreover, the valuation of the preferred stock may have been flawed and inconsistent with the limited contractual rights of the preferred stock and contrary to Delaware law. As a result, the Proxy Statement may have failed to disclose material information about the recapitalization.
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