The suit names the Bradenton, Florida-based professional employer organization, its directors and TriNet as defendants. It argues that Gevity’s board breached its fiduciary duties to shareholders in approving the merger. Gevity said in its 10-K filing it believes the lawsuit is without merit.
The Tampa Bay Business Journal named the plaintiff in the case as Judy Crump.
TriNet, a San Leandro California-based professional employer organization, announced this month that it had struck a deal to acquire Gevity. TriNet would pay $4 per share in cash for all outstanding shares of Gevity, valuing the deal at $98 million.
The deal was expected to close in the second quarter, and Gevity’s largest shareholder, ValueAct Capital Management, agreed to vote in favor of the merger.
Gevity also reported in its 10-K that the Internal Revenue Service sent notices of proposed adjustment after an examination of the company’s tax returns of 2002 through 2004. The notices call for an increase in Gevity’s federal income tax by $41.9 million including penalties.
Gevity reported it had reserved $6.9 million of federal income taxes in its consolidated financial statements, but said the remaining proposed increases are “either the result of the IRS misunderstanding the facts relating to the adjustments or the result of a legal interpretation made by the IRS that is inconsistent with existing law.”
Gevity said it will contest the proposed increases.
Gevity reported full-year 2008 revenue of $520.5 million.
--Staffing Industry Analysts