Fifth Street Finance Corp.
Secured advisory fee reductions worth at least $30 million to Fifth Street Finance Corp. and comprehensive corporate governance, oversight, and conflict management enhancements on allegations of breaches of fiduciary duty and other violations of law arising out of Fifth Street’s relationship with its investment adviser.
Robbins LLP served as lead counsel in shareholder derivative litigation on behalf of Fifth Street Finance Corp., which alleged breaches of fiduciary duty and other violations of the law arising out of Fifth Street’s relationship with its investment adviser, FSAM. Specifically, plaintiffs asserted that certain Fifth Street and FSAM officers and directors caused Fifth Street to pursue reckless asset growth strategies, employ aggressive accounting and financial reporting practices, and pay excessive fees to its investment adviser to inflate the perceived value of FSAM prior to FSAM’s initial public filing.
Following an extensive factual investigation, the exchange of enormous amounts of information, and protracted settlement negotiations and mediations, the firm negotiated an outstanding result for Fifth Street and its stockholders, which included advisory fee reductions worth at least $30 million to the company and comprehensive corporate governance, oversight and conflicts management enhancements to substantially improve the compliance control environment at Fifth Street, and reduce the likelihood of a recurrence of similar wrongdoing in the future.
In re Fifth Street Finance Corp. Shareholder Derivative Litigation, Lead Case No. 3:15cv01795RNC (D. Conn. Dec. 13, 2016),