Updated 5:40 p.m. A private equity group that has controlled Erickson Air Crane since 2007 is selling its stake, raising eyebrows in the investment and legal world.
At least two law firms said today they are investigating ZM Funds' exit. New York-based Rosen Law Firm and Ademi & O’Reilly of Milwaukee are looking into Erickson Air-Crane board activity for possible self-dealing, breaches of fiduciary duty and other violations of state law in connection with its recent acquisition of Evergreen Helicopters.
A report, based on Securities and Exchange Commission filings, was published on SeekingAlpha.com today asserting ZM Funds orchestrated the recent purchase of Evergreen Helicopters, the struggling McMinnville helicopter operator. SeekingAlpha writer Richard Pearson wrote the acquisition effectively allowed ZM Funds to exchange $120 million of Evergreen Helicopters debt for millions of more valuable shares in Erickson.
An SEC filing earlier this week indicates ZM Funds, which has two positions on the Erickson board, intends to sell all of its remaining shares in Erickson.
Ademi & O’Reilly asked the Erickson board to “rescind or otherwise seek to recover losses stemming from the acquisition,” in a release. “Erickson has already conceded that ZM may take certain actions and approve certain transactions which are not in the interests of other shareholders and which other shareholders would not approve, but the board is not relieved of its fiduciary duties not to waste corporate assets and not to engage in self-dealing,” the Milwaukee firm said
Erickson Air-Crane employs about 500 people at its primary maintenance and manufacturing plant on Willow Springs Road outside Central Point.
Telephone messages to Erickson Air-Crane and Rosen Law Firm were not immediately returned.
Not many days ago, Erickson Air-Crane was a darling in the small-cap investment world.
The heavy-lift helicopter company's acquisitions of Evergreen Helicopter in McMinnville and a South American energy company's flight wing attracted 15 minutes of fame when CNBC "Mad Money" host Jim Cramer interviewed CEO and President Udo Rieder. After that mid-May engagement, Erickson shares rose to as much as $29.42.
As late as last Friday shares were trading for $26.90, but this week the stock has tumbled. It lost another $4.61 today, dipping below the $20 mark before closing at $20.05.
Rosen Law said Erickson Air-Crane common shareholders, should go to www.rosenlegal.com or contact Phillip Kim or Kevin Chan at 866-767-3653 or via e-mail at email@example.com or firstname.lastname@example.org. Shareholders wishing to reach Ademi & O’Reilly, should contact Guri Ademi either at email@example.com or toll-free: 866-264-3995 or www.ademilaw.com/case/erickson-air-crane-incorporated.
— Greg Stiles