KKR Sued Again Over Restructuring of Retailer CCM Associates II, LLC After $258MM Acquisition

Lawsuit filed in Delaware District Court is similar to claims filed by members of retailer Fleet Farm's founding family in April of this year after $1.1 billion deal and subsequent restructuring.

WILMINGTON, Del., Sept. 5, 2023 /PRNewswire/ -- CCM Associates filed a lawsuit last week in Delaware federal court (Case number 1:2023cv00934) against Channel Control Merchants, its controlling shareholder KKR & Co., and others for fraud and/or aiding and abetting fraud, and gross negligence. The complaint outlines a deliberate attempt by the defendants to intentionally make false and material misleading statements through the company's 2019 financials by overstating inventory values in order to conceal the fraud and mismanagement of the company. These actions ultimately led to the company restructuring the plaintiff's equity value to pennies on the dollar.  The plaintiffs have sued for a financial amount of damages to be determined at trial.    

Legal-Bay, a leader in mass tort lawsuit funding and commercial litigations, had been following the Fleet Farm litigation, and now will be monitoring the developments in the new claims against KKR by CCM And Associates.   

CEO of Legal-Bay, Chris Janish, commented on the filings, "The two separate lawsuits filed by national retailers outline similar claims of fraud which ultimately led to a restructuring of the plaintiff's equity values to almost nothing.  A pattern of lawsuits typically does not bode well for defendants in the court of public opinion, nor does it help the defendants when trying to make future acquisitions and representations in good faith." 

Legal-Bay is not an active funding participant in the case. However, the company does report news on national mass tort and commercial litigations. Typically, these cases are complex in nature and are not eligible for funding until they have made some progress through the courts.   

At this point in the CCM litigation, KKR and the other defendants are assumed to deny any wrongdoing or liability in regards to the claims. Calls to the defendants requesting comment were not returned. 

CCM Associates and their law firm also refused to comment at this juncture of the litigation other than the claims outlined in their lawsuit filing. CCM Associates is represented by national law firm, Fox Rothschild out of Delaware and Morristown, N.J.

SOURCE Legal-Bay, LLC

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