Robbins Umeda LLP Announces an Investigation of Encore Capital Group, Inc.
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Encore Capital Group (NYSE: ECPG).
Robbins Umeda LLP’s investigation focuses on whether officials at Encore breached their fiduciary duties to shareholders, were unjustly enriched, and wasted corporate assets to the detriment of the company and investors. In particular, the firm is investigating allegations that officials at the company caused Encore to conduct its consumer debt recovery business in a patently unlawful and illegal fashion. The firm is examining allegations that Encore, through its wholly owned subsidiaries, Midland Funding, LLC and Midland Credit Management, Inc., employed a variety of deceptive and unlawful litigation tactics, such as the use of robo-signed affidavits, which were designed to deprive alleged debtors of their day in court.
Additionally, Robbins Umeda is examining whether officials at the company richly and unjustly rewarded executive officers at Encore based on the profitability and success of these illegal practices.
Since these allegations have emerged, the company has increasingly become the focus of costly public and legal scrutiny. For example, several Attorneys General, including those of Minnesota and Texas, have filed lawsuits against Encore’s subsidiaries. Furthermore, the company has recently disclosed that the Attorney General of California has also commenced an investigation into the company.
One option available to investors of Encore is to file a shareholder derivative action to hold those that allegedly damaged Encore accountable. Remedies commonly sought in derivative actions include corporate governance reforms designed to prevent future misconduct, removal of officers or directors whose misconduct injured the corporation, and monetary payments in the form of damages and/or disgorgement of ill-gotten gains.
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