St. John Knits Lawsuit Becomes Class Action

A shareholder lawsuit tied to the management-led buyout of St. John Knits Inc. has been granted class-action status by an Orange County Superior Court judge, the shareholders’ attorneys said Friday. The lawsuit, which accuses the Irvine-based company and its executives of breach of duty, “self-dealing” and negligence, was certified Tuesday by Judge William F. McDonald, according to Milberg Weiss Bershad Hynes & Lerach LLP. About a half-dozen lawsuits were filed after Chief Executive Robert E. Gray, his family, and Vestar Capital Partners announced last December that they wanted to buy the company and take it private. The lawsuits, which have been consolidated, maintained that the price was too low. The Grays and the New York investment firm initially said they would pay $28 a share for the company but later bumped the offer to $30 a share, or $522 million. Shareholders approved the buyout in June.