Carbonite’s Lewiston office on Mollison Way. Sun Journal file photo

LEWISTON — Shareholders in Delaware and Colorado have filed four lawsuits, two of them class action, against Carbonite Inc. to stop its sale to Canada-based OpenText.

The data protection company and OpenText announced the pending $1.42 billion sale Nov. 11 with officials expecting to close in 90 days.

A lawsuit filed Dec. 11 in U.S. District Court in Delaware alleges board members and executive officers will receive a “windfall” of up to $55.3 million on top of a severance plan if it goes through.

It also claims Carbonite board members named in the suit used a “materially incomplete and misleading recommendation” in a statement filed with the U.S. Securities and Exchange Commission that encouraged shareholders to support the sale.

Carbonite’s SEC filings last week noting the new litigation all end: “The defendants believe that the claims asserted in the complaint are without merit.”

A Carbonite spokeswoman deferred comment Wednesday to OpenText, whose spokesman said his company had nothing to add.

Three of the four suits were filed between Dec. 5 and 11 by Rigrodsky & Long, PA, of Wilmington, Delaware, working with three outside law firms. They additionally name OpenText and Coral Merger Sub Inc., OpenText’s subsidiary, as defendants.

The fourth was filed in U.S. District Court in Colorado by Halper Sadeh LLP out of New York, New York, on Dec. 10.

Neither law firm responded to requests for comment.

All four ask for a jury trial.

Plaintiffs in each suit — Jordan Rosenblatt, Shiva Stein, Mark Thomas and Kimberly Lachut — are all described as Carbonite shareholders.

The suits each make a similar complaint against J.P. Morgan Securities, Carbonite’s financial adviser, saying it didn’t disclose all of the data that went into its financial analyses of the company and that shareholders were unaware that as J.P. Morgan was telling Carbonite’s board it considered the merger with OpenText fair to Carbonite’s shareholders, J.P. Morgan was doing other business with OpenText at the same time.

“J.P. Morgan and its affiliates served as joint lead arranger and joint bookrunner on OpenText’s refinancing of its revolving credit facility, earning approximately $1.1 million in fees while advising Carbonite on its proposed transaction with OpenText,” according to Lachut’s suit. “Disclosure of a financial adviser’s compensation and potential conflicts of interest to shareholders is required due to their central role in the evaluation, exploration, selection and implementation of strategic alternatives and the rendering of any fairness opinions. Disclosure of a financial adviser’s potential conflicts of interest may inform shareholders on how much weight to place on that analysis.”

OpenText CEO Mark J. Barrenechea last month told investors that “1,500 employees and world-class talent in security, data protection and cloud operations” were among the reasons the Canadian security tech firm wanted to buy Carbonite.

Headquartered in Boston, Carbonite opened a Lewiston call center above a bowling alley on Mollison Way shortly after it announced it was coming to town in 2011.

Carbonite had created more than 365 new jobs here by 2014, according to annual reports filed with the state for tax incentives under the Pine Tree Development Zone Program.

In 2017, the company started hiring new workers at a Jamaican call center as lower-skilled workers left the Lewiston office, part of what an official said was a new strategy that reflected Carbonite’s changing customer base.

Last year, the company had 156 Lewiston employees, according to its 2018 Pine Tree Development Zone Program filing.


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