| WILMINGTON, Delaware
WILMINGTON, Delaware The founders of Spirit Finance Corp sued a unit of Australia's Macquarie Group Ltd (MQG.AX), which acquired Spirit in 2007, accusing it of "gravely" harming the company, according to court documents.
Spirit founders Morton Fleischer and Christopher Volk said Macquarie and its partners in the acquisition of the real estate investment trust have resisted recapitalizing the company to protect their controlling majority.
As a result, Spirit was "gravely harmed by the self-interested actions, and deliberate inaction, of the majority shareholders, their representatives on the boards, and their consultants," according to the complaint.
The lawsuit was filed in the Chancery Court of Delaware, where Spirit's parent company is incorporated.
The value of shareholders' equity in Spirit has "significantly declined" due to the actions of Macquarie and its partners because they have deprived Spirit of needed capital, the suit said.
Macquarie and its partners bought the REIT in 2007 for about $1.6 billion.
As part of the transaction, the new majority shareholders "induced" Fleischer, Volk and three other executives to invest $35 million of their own money in the newly private company, according to the complaint, which seeks monetary damages.
Shortly after, capital and real estate markets turned south. While Fleischer and Volk encouraged the majority shareholders to find new investment partners to recapitalize Spirit, Macquarie's representatives on the board resisted.
The complaint said attempts to find a new investor were resisted so that the majority owners could retain their control of Spirit.
Earlier this year, Spirit terminated the employment of Fleischer, Volk and the three other executives, according to the complaint.
Macquarie declined to comment.
The case is Morton Fleischer et al v Macquarie Investment Holdings No 2 Pty Ltd et al and Redford Holdco LLC et al, Chancery Court, State of Delaware, No. 5391.
(Reporting by Thomas Hals; editing by Dave Zimmerman and John Wallace)