Peterson Young Putra Files Amended Complaint Against K12 Seeking Rescission

SEATTLE, Sept. 1 /PRNewswire/ -- The Seattle law firm Peterson Young Putra yesterday filed an amended complaint naming K12, Inc. (NYSE: LRN) as defendant in a pending lawsuit that accuses KC Distance Learning, Inc., a company K12 recently acquired, of violating the Securities Act of Washington, misrepresentation, and breach of the implied covenant of good faith and fair dealing.

According to the amended complaint, KC Distance Learning agreed to buy the assets of Aventa Learning, Inc. in January 2007 for cash, an earn-out payment based on a formula tied to KC Distance Learning's net revenues and earnings before interest, taxes, depreciation and amortization (EBITDA), and a phantom equity interest in KC Distance Learning.

The amended complaint alleges that, during negotiations, KC Distance Learning gave plaintiffs a five-year model of EBITDA totaling more than $85 million.  The amended complaint also alleges that plaintiffs recently discovered that the five-year model was not generated in good faith and was not, as it was represented to be, KC Distance Learning's best estimate of expected EBITDA.  

K12 subsequently acquired KC Distance learning.  Attorneys for the plaintiffs have asked the court to rescind the Aventa Learning transaction. The original suit was filed in the U.S. District Court for the Western District of Washington in Seattle.

Peterson Young Putra also announces that it is investigating potential claims against K12 concerning disclosures related to the acquisition of KC Distance Learning and the then-pending lawsuit against KC Distance Learning.

About Peterson Young Putra

For more information concerning the amended complaint or Peterson Young Putra's investigation, please contact attorney Michael A. Goldfarb at (206) 624-6800.  Founded in 1973, Peterson Young Putra is a Seattle-based law firm.  Additional information about Peterson Young Putra is available at www.pypfirm.com.

Contact: Michael Goldfarb – 206-624-6800

SOURCE Peterson Young Putra