Man sues Portect Rail Products, Marshall Reynolds, others for violating fiduciary duties

By Kyla Asbury | Mar 22, 2010

CHARLESTON -- A man is suing Portec Rail Products, L.B. Foster Company, Foster Thomas Company and Huntington businessman Marshall Reynolds for knowingly or recklessly violating their fiduciary duties.

John Cooper, Philip Cline, Daniel Harrington, Douglas Reynolds, Neal Scaggs, A. Michael Perry, Thomas Wright, Phillip Shell, Louis Akers and Kirby Taylor were also named in the suit.

Josh Furman owns shares of common stock of Portec, according to a complaint filed March 3 in Kanawha Circuit Court.

Furman claims the defendants violated their duties of loyalty, good faith and independence owed to him and other public shareholders of Portec.

To comply with their fiduciary duties, the defendants are not allowed to take any action that adversely affects the value provided to the corporation's shareholders; favors themselves or will discourage or inhibit alternative offers to purchase control of the corporation or its assets; contractually prohibits them from complying with their fiduciary duties; will otherwise adversely affect their duty to search and secure the best value reasonably available under the circumstances for the corporation's shareholders; and will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

Furman claims the defendants aided and abetted and rendered substantial assistance to each other in breach of their respective duties and in taking such actions.

Furman is seeking for his action to be declared a class action and certifying him as the Class representatives and his counsel as Class counsel; enjoining, preliminarily and permanently, the proposed transaction; and directing the defendants to count to him and other members of the Class for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties. He is being represented by Jeffrey V. Mehalic, Eduard Korsinsky and Eric M. Andersen

The case has been assigned to Circuit Judge Carrie Webster.

Kanawha Circuit Court case number: 10-C-400

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