MONTH-IN-BRIEF (Mar 2021)
Court Holds Acquisition of GetGo Did Not Rise to the Level of Securities Fraud
By Dixon Babb
On March 18, 2021, the United States District Court for the District of Massachusetts (the “Court”) dismissed a lawsuit brought against LogMeIn, Inc., a subscription-based provider of services to mobile professionals and IT service providers (“LogMeIn”), that was filed in 2018 in connection with LogMeIn’s acquisition of GetGo, Inc., a food-ordering technology platform (“GetGo”). Plaintiffs alleged that LogMeIn made fraudulent statements regarding its status and financial projections following its acquisition of GetGo. Following the merger, LogMeIn attempted to convince former GetGo users to convert to LogMeIn’s preferred annual subscription plan, but were unable to do so. Several of the customers began leaving LogMeIn, which caused its share price and financial projections to decrease. However, according to the plaintiffs, LogMeIn continued to report that the transition was going smoothly, despite LogMeIn’s alleged realization that the synergies were not amounting to what it had forecasted.