Smartsheet Tender Offer Securities Class Action

The parties have reached a class action settlement in a lawsuit arising out of the sale of Smartsheet stock in a 2017 Tender Offer. On March 11, 2022, the Court granted final approval of the class action settlement.

Under the terms of the settlement, Defendants will establish a $26.2 million settlement fund for the benefit of the settlement class. The settlement fund will be used to make direct payments to members of the settlement class, as well as to cover notice and administration costs, $20,000 in service awards, $6.157 million in attorneys’ fees and $355,120.76 in costs. The settlement class includes all individuals and entities who sold stock in Smartsheet, Inc. in connection with the tender offer for stock of Smartsheet, Inc. dated June 2, 2017, with certain exceptions.

• Class members who did not exclude themselves will receive a check for their pro rata share of the settlement fund, calculated based on their participation in the tender offer. Plaintiffs estimate that each settlement class member will receive approximately the same amount as they received for their shares in the tender offer. The settlement administrator will begin distributing funds after June 11, 2022.
• Copies of the settlement agreement, preliminary and final approval orders, and the attorney fee award are available below.

The Court appointed the law firms of Tousley Brain Stephens and McNaul Ebel as Class Counsel, and Jason T. Dennett as Lead Class Counsel. If you have questions about the settlement or your participation as a settlement class member, or if you would like to provide us your updated address for the distribution of your share, you can reach us at (206) 621-1158 or by contacting jdennett@tousley.com.

In June and July 2017, various private equity funds associated with Insight Venture Partners conducted a “tender offer”: they offered to buy shares of stock of Smartsheet, Inc.—then a privately-held corporation—from Smartsheet’s existing shareholders.

In December 2019, one of the shareholders who tendered his stock filed a class action complaint against the Insight entities and their principal Ryan Hinkle for breaches of the Washington State Securities Act (“WSSA”). The complaint alleges that as part of that tender offer, the defendant Insight entities violated WSSA by purchasing shares in the tender offer but failing to disclose material information related to Smartsheet and Smartsheet’s plans to conduct an Initial Public Offering.

Since the tender offer, the Insight entities liquidated all of their shares in Smartsheet, and Ryan Hinkle is no longer a member of Smartsheet’s Board. In filing this lawsuit, Plaintiffs were seeking to recover, on behalf of the class, all of the profits that the Insight entities realized as a result of their breaches of the WSSA.

Below are copies of Plaintiff’s complaint and the Court’s order denying the defendants’ motion to dismiss, which the Court issued on May 1, 2020.

If you have further questions, you can reach us by contacting any of the attorneys listed on left side of this page by clicking their profile and sending them an email.