Capella

Practice Area: 
Stock Symbol: 
CPLA
Case Status: 
Investigations

Ademi & O’Reilly, LLP is investigating the Board of Directors of Capella Education Company (Nasdaq: CPLA) for possible breaches of fiduciary duty and other violations of Minnesota law in connection with the sale of Capella to Strayer.

Ademi & O’Reilly, LLP alleges Capella’s long-term financial outlook is improving and yet Capella shareholders will receive 0.875 Strayer shares for each Capella share.  Strayer is well aware of Capella’s improving financial metrics and is purchasing Capella at a substantial discount. The merger agreement unreasonably limits competing bids for Capella by (i) prohibiting solicitation of any further bids, and (ii) imposing a termination penalty should Capella receive and accept a superior bid. Capella insiders, their affiliates and other major shareholders own significant voting stock, and will receive millions of dollars as part of change of control arrangements, and therefore can unduly influence a sale of Capella. Our investigation centers on the conduct of Capella’s Board of Directors, who have unanimously approved the transaction, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for Capella given its current financial condition and prospects.