Facts

Shareholders filed a derivative action against Bridgepoint Education Inc. and members of its Board of Directors, including Andrew Clark, Ryan Craig, Dale Crandall, Marye Fox, Patrick Hackett, Robert Hartman, and Ardash Sarma, as well as the company's controlling stockholder, Warburg Puncus Private Equity VII LP and its affiliates.

PLAINTIFFS' CONTENTIONS:
Plaintiffs alleged that defendants' decision to approve a self-tender offer harmed stockholders. Plaintiffs alleged that the timing and pricing demonstrated that the self-tender offer was a sham, and was intended only to benefit the company's controlling stockholder, Warburg and the individual defendants at the expense of the company. Plaintiffs also alleged, among others, that offer to purchase failed to disclose material information. Moreover, plaintiffs alleged that the per share tender offer price was grossly excessive and represented a substantial and unjustifiable premium to the company's public traded stock price.

DEFENDANTS' CONTENTIONS:
The individual defendants moved to dismiss plaintiffs' complaint for failure to first demand action from the corporation's directors, as required under the rules of civil procedure.

Result

The court granted defendants' motion to dismiss, but allowed plaintiffs to amend their complaint.

Other Information

FILING DATE: Dec. 9, 2013.