Investors of Good Technology Corp. are suing J. P. Morgan for breach of fiduciary duty. According to an amended lawsuit filed on Thursday in Delaware Chancery Court, shareholders of Good said J. P. Morgan was deeply conflicted in its dealings with the company. That led the start-up to sell itself to BlackBerry last year at a fire-sale price.
According to the amended complaint, Good was being advised by J. P. Morgan at the same time that BlackBerry was also being advised by the bank. J. P. Morgan’s need to maintain a business relationship with BlackBerry, which was the larger company, spurred the bank to put that relationship above the one with Good, the amended complaint alleges.
The defendants “pushed incompatible self-interested agendas about how or when to obtain desperately needed financing for Good, and how or when to sell Good,†according to the amended complaint.
According to the original suit, the BlackBerry deal was driven solely by the self interests of several venture capital firms that controlled Good Technology and its board, namely Oak Investment Partners, Draper Fisher Jurvetson, Riverwood Capital, Lazard Technology Partners and Rustic Canyon Partners, which hold most of Good Technology’s preferred stock.
Moreover, Good Technology had turned down better offers in the past year, including one for $825 million, nearly double BlackBerry’s offer. The investors claimed instead of pushing a deal which maximized value for common stockholders, Good Technology Chair and CEO Christy Wyatt pushed for a “retention plan†so that she and her management team could be guaranteed millions of dollars in cash after the BlackBerry deal was consummated.
In addition to a block of the deal, the suit seeks unspecified damages.
A J. P. Morgan spokesman declined to comment.
