Bryant Riley, co-chief executive and chairman of B. Riley Financial Inc.

Bryant Riley, co-chief executive and chairman of B. Riley Financial Inc. Photo by Ringo Chiu.

Woodland Hills-based B. Riley Financial Inc. and a Florida-based private equity firm have settled litigation with Rent-A-Center Inc. that excludes B. Riley from financial liability, according to the company.

In an April 22 Securities and Exchange Commission filing, B. Riley indicated it is “making no financial contribution in connection with the settlement,” which was announced April 18.

A Delaware Chancery Court had ruled in March that Rent-A-Center, a rent-to-own retail products company based in Texas, could terminate its $1.4 billion agreement to merge with a Florida private equity firm, Vintage Capital Management. That potentially placed Vintage and financial adviser B. Riley on the hook to pay a breakup fee of $126.5 million.

Separate from B. Riley’s SEC filing, Rent-a-Center announced it had agreed in principle to settle all litigation with Vintage and B. Riley Financial relating to the company’s termination of the merger with Vintage.

The three parties — B. Riley, Vintage and Rent-A-Center — agreed that only Vintage would pay $92.5 million to Rent-A-Center by May 23. The filing did not explicitly say B. Riley was excluded from any financial obligation, and Rent-A-Center did not provide more detail when contacted by the Business Journal.

“With the settlement, all litigation regarding the previously terminated merger and the dispute over the termination fee with Vintage Capital and B. Riley Financial will be resolved,” Maureen Short, Rent-A-Center’s executive vice president and chief financial officer, said in a statement issued to the Business Journal. “We are confident the $92.5 million settlement payment will be paid to us when due, and we will not be commenting further with respect to the payment of the settlement amount or any additional details.”

B. Riley is not a party to the merger agreement but did secure the necessary debt and equity financing to fund the transaction months before Rent-A-Center elected to cancel the merger.

Rent-A-Center initially terminated the merger agreement in December. It had agreed to be purchased for $1.4 billion in June 2018.

B. Riley Financial, which was serving as a financial adviser and lead arranger for the Vintage Capital deal with Rent-A-Center, previously announced its support of Vintage Capital and said it believed Rent-A-Center’s purported termination in December was invalid.

• • •

CBB Extends CEO’s Contract, Hires CFO

Koreatown’s CBB Bancorp Inc., parent of Commonwealth Business Bank, entered into a new employment contract with Joanne Kim, who has served as president and chief executive officer over the past eight years.


For reprint and licensing requests for this article, CLICK HERE.