An investor sued United Rentals Monday over the collapse of its leveraged buyout by affiliates of Cerberus Capital Management, alleging that company executives concealed risks about the deal’s financing before it fell apart.
The lawsuit, brought in U.S. District Court in Connecticut, contents that United Rentals violated securities laws by not properly disclosing to shareholders that Cerberus had expressed concerns about its ability to proceed with the transaction. According to the complaint, United’s failure to disclose this information “was materially misleading because it caused the market for [United’s] shares to trade at prices artificially inflated by the belief that the transaction would succeed.”
The lawsuit was filed by an individual investor, Vincent DeCicco, and seeks class-action status. DeCicco is represented by law firm Abbel Spanier Rodd & Abrams LLP, and names United Rentals executives and directors in addition to the company.