Grubhub Is Being Questioned In Latest Class Action; Just Eat Partnership Allegedly Harmful For Investors And Riddled With Shady Dealings
Grubhub is being sued by an investor in the company after they allegedly violated different securities regulations in its impending merger with company Just Eat that would end up benefitting the company’s top brass leadership – leaving out other stockholders in the process.
Grubhub Sued In New York Court
A class action lawsuit is being filed in a federal court in New York by plaintiff Frank Ferreiro. He is looking to sue on behalf of all the public investors of Grubhub in the case.
Ferreiro claimed that the proposed upcoming merger between Grubhub and Just Eat would hurt the best interests of the general stockholders of the company.
The class action lawsuit alleged that Grubhub executives and board members will be able to pocket $7.3 billion in the upcoming deal’s closure. Regular everyday company shareholders are reportedly left out of big money gains the top brass are expected to receive at the end of the merger.
Meanwhile, Grubhub investors are reported to receive a share of Just Eat stock when the deal succeeds. However, they are not protected under the current terms of the merger agreement inked between Grubhub leaders and Just Eat’s management.
Investors Left Out Of The Picture While Company Execs Reap Massive Benefits
Ferreiro, among other investors, believed that they would not be given protection in case of the possible fluctuations and instability of the common stock should the merger commence.
Additionally, he accused the company executives of neglecting to conduct a thorough look at the market and Just Eat’s current state of affairs and market performance.
He further argued that the top management members of Grubhub were given many grand promises by Just Eat ranging from lucrative severance pays in case they lose their positions at Grubhub to guaranteed top positions in Just Eat at the merger’s conclusion.
The aforementioned benefits were not provided to everyday Grubhub stockholders. Investors were allegedly not informed properly of the merger details and were even provided with misleading information and misrepresented claims.
The complainant is seeking to gain the court’s orders to halt the impending merger between the two food delivery companies.
Furthermore, Ferreiro is attempting to secure the court’s approval to force the top company executives to negotiate for the highest price for the sake of the company and its everyday stockholders and to properly inform and disseminate helpful information to the general stockholders.
Defendant Corporate Details
Grubhub is an Illinois corporation founded in 2004. The company mainly focuses on providing online food delivery services through its many platforms.
Headed by Matt Maloney as their company CEO since its founding, the company has been known to connect platform users and restaurant-goers with different restaurants via their services.
Meanwhile, Just Eat is a Danish online food order and delivery service company founded in 2001. Currently headquartered in the United Kingdom, the company operates in more than ten countries on different continents worldwide.
Editor’s Note on Grubhub & Just Eat Merger Class Action Lawsuit:
This feature report aims to provide you the latest class action lawsuit filed against Grubhub in relation to its pending agreement with fellow food delivery company Just Eat.
Case Name(s) & No.(s): Ferreiro v. Grubhub, Inc., et al.; Case No. 1:21-cv-03945
Jurisdiction: United States District Court for the Southern District of New York
Allegation(s): Grubhub failed to properly disclose to their company investors the risks of their merger with fellow food company Just Eat. In addition, they will not reportedly benefit from the upcoming partnership, while company executives will gain a lot from the deal.
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