CNBC anchor Marcus Lemonis and other board members of Camping World Holdings Inc. are clear of insider trading lawsuits after the Delaware Supreme Court dismissed claims by investors that he sold tens of millions of shares while facing integration problems a takeover.
The state’s judiciary upheld a decision by Vice Chancellor Lori W. Will dismissing the case in Delaware’s Chancery Court in January. Will believed that the investors leading the case had no excuse for not first requesting a board investigation, which is generally a prerequisite for filing a shareholder derivatives lawsuit.
Although the allegations about Lemonis “may come as close as possible” to showing wrongdoing, the lawsuit stumbled on the cusp because at least six members of the nine-member board were not at personal legal risk, while at least five were independent of Lemonis, Will said at the time .
The case, which began in 2019, dates back to Camping World’s 2017 acquisition of bankrupt sporting goods retailer Gander Mountain Co. The lawsuit was filed by a police pension fund and an individual investor.
In addition to Lemonis, who hosts business-rescue reality show The Profit, it targeted the rest of the board at the time, along with affiliates of Crestview Partners LP, a major investor in Camping World, the country’s largest RV dealership chain.
The lawsuit accused Crestview affiliates and a Lemonis investment vehicle of insider stock sales worth $172 million and $172 million, respectively.
Will dismissed those allegations, saying none of the allegations showed that Crestview’s officers of Camping World’s board of directors had inside information at the time of the stock sales, which tended to follow rather than precede negative public disclosures.
The Delaware Supreme Court issued a unilateral judgment upholding the decision “on the basis and on the grounds assigned by the Court of Chancery.” Judges Gary F. Traynor, Karen L. Valihura and James T. Vaughn Jr. presided over the appeal.
Lemonis, Camping World and the other board members were represented by Richards, Layton & Finger PA and Latham & Watkins LLP. The investors were represented by Young Conaway Stargatt & Taylor LLP and Robbins LLP.
The case concerns Camping World Holdings Inc. shareholder diversion. Litig., Del., No. 52, 2022, 10/13/22.