Camping World shareholders have sued Marcus Lemonis, and the private equity firm leading Gander Mountain’s comeback for running a “massive insider selling scheme.”
The suit, filed in the U.S. District Court of Northern Illinois last week, alleges that Camping World investors were mislead during the rebranded Gander Outdoors rollout, the defendants sold over $530 million worth of Camping World Class A shares at artificially inflated prices.
Camping World acquired Gander Mountain from bankruptcy in May of 2017 for approximately $37 million, announcing a plan to quickly reopen 70 of the big box outdoor retailer’s stores under a new, Gander Outdoors, moniker. By June, that plan had been scaled back to 57 stores. The lawsuit, filed on behalf of of all purchasers of Camping World Class A stock between March 8, 2017 and August 7, 2018, and cites Gander Mountain specifically.
“In May 2017, Camping World announced that it would be expanding its operations to include retail stores for outdoor sporting supplies and accessories by acquiring assets of Gander Mountain Co. from bankruptcy…this securities fraud class action arises from materially false and misleading statements made by defendants during the Class Period regarding Camping World’s financial performance, including its historical financial results and its integration and operation of the newly acquired Gander stores.”
According to the suit, integration of Gander stores suffered severe setbacks that negatively impacted margins, rather than bolstering them.
Lemonis, during a quarterly conference call, dubbed the Gander rollout a “giant sh*t show.”
That show, plaintiffs say, sent Camping World stock plunging from $47 per share to below $20 a share, “costing investors hundreds of millions of dollars.”
In addition to Lemonis and Crestview Partners, the suit lists Camping World CFO Thomas Wolfe, COO Brent Moody, and director Stephen Adams as defendants.
Shareholders are requesting a trial by jury and certification of the case as a class action.