Renewable Energy Group Sued by Shareholder Alleging Misrepresentations in Chevron Deal

On Sunday, stockholder Dawn Brozik filed a complaint in the Eastern District of New York alleging violations of the Securities Exchange Act of 1934 against Renewable Energy Group, Inc. and its directors. 

According to the complaint, Renewable Energy Group is a Delaware corporation and a provider of lower carbon transportation fuels through the conversion of natural fats, oils and greases into advanced biofuels.

The complaint alleges that in January 2020, Renewable Energy Group and Chevron engaged in discussions of renewable diesel production and subsequently discussed forming a joint venture and strategic partnership to create a petroleum refinery and supply company. In late December 2021 and into January 2022, defendant and Renewable Energy Group’s CEO, Cynthia Warner, met with Chevron to discuss a proposal in which Chevron would acquire Renewable Energy Group for $61.50, and Cynthia Warner would join Chevron’s Board of Directors. 

Subsequently, Renewable Energy Group retained Guggenheim Securities, LLC as a financial advisor to the Board in connection with the proposed acquisition and on February 27, 2022, Renewable Energy Group and Chevron executed the merger agreement. The complaint states that on March 23, 2022, the defendants filed a Preliminary Proxy statement with the SEC which provides information on the transaction and recommends that all Renewable Energy Group shareholders vote in favor of the transaction. 

The plaintiff argues that the Preliminary Proxy statement omits and misrepresents material information and if they are not remedied before the anticipated shareholder vote, shareholders will be forced to make a voting decision on the transaction without full disclosure of all material. Specifically, the plaintiff argues that there are omissions and misrepresentations about potential conflicts of interest from Renewable Energy Group’s board of directors and Guggenheim Securities, LLC, the sales process leading up to the transaction, the financial analysis performed by Guggenheim and its impartiality and Renewable Energy Group’s financial projections. 

The plaintiff argues that the omissions and misrepresentations in the Preliminary Proxy statement is in violation of Sections 14(a) and 20(a) and Rule 14a-9 of the Securities Exchange Act and seeks injunctive and declaratory relief, attorney’s fees and costs. The plaintiff is represented by Halper Sadeh, LLP