A Delaware judge said Royal Bank of Canada should be held liable to former shareholders of Rural/Metro Corp because it failed to disclose conflicts of interest that tainted the $438 million takeover of the ambulance operator. Bankers at RBC Capital Markets were so eager to collect higher fees that they convinced Rural/Metro directors to sell the company in June 2011 to private equity firm Warburg Pincus LLC at an unreasonably low $17.25 per share, wrote Vice Chancellor J. Travis Laster of the Delaware Chancery Court.Former Rural/Metro Corp shareholders are seeking about $172 million from Toronto-based RBC, representing the difference between the buyout price and what they believe the company was worth, according to published reports.In a 91-page decision dated March 7, Laster, who presided over a four-day civil trial in the case last May, said RBC bankers also concealed their efforts to provide financing to fund the buyout and other transactions, offering the opportunity for "additional and far greater" fees that they coveted."RBC created the unreasonable process and informational gaps that led to the board's breach of duty," Laster wrote. "Under the circumstances, RBC's aiding and abetting of the board's breaches of fiduciary duty harmed Rural's stockholders."
Royal Bank of Canada is a Canada-based banking company. Shares of RY fell by 1.34% or $-0.88/share to $64.65. In the past year, the shares have traded as low as $55.49 and as high as $68.89. On average, 515905 shares of RY exchange hands on a given day and today's volume is recorded at 465599.
Royal Bank of Canada is a Canada-based banking company. Shares of RY fell by 0.24% or $-0.17/share to $71.70. In the past year, the shares have traded as low as $58.55 and as high as $73.35. On average, 2079160 shares of RY.TO exchange hands on a given day and today's volume is recorded at 1416340.
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