Three shareholders of real estate software company Remine filed a lawsuit against the company Thursday following its acquisition by four multiple listing services.
The investors — Alexander Atwood, Brian de Schepper, and Jonathan Ferris — are demanding their shares be appraised and that Remine pay fair value for them.
“Remine is required to pay the Petitioners the fair value of their common stock, as determined by the Court in this appraisal action,” the shareholders’ attorneys wrote in a petition to Delaware’s Chancery Court.
Remine, a company that in its short history has been plagued by financial troubles, plunging personnel rolls, and a toxic work environment, is now a subsidiary of MLS Technology Holdings LLC, a joint venture owned by four MLSs, that acquired Remine in October 2021.
Those four MLSs are the Austin Board of Realtors’ ACTRIS MLS, First MLS, Heartland MLS and Miami Realtors’ MLS. Remine offers an MLS platform whose components the company sells as individual modules, and the company serves nearly 60 Realtor associations and MLSs representing 1.2 million real estate professionals.
According to the petition, on Oct. 15, 2021, Remine merged with Velocity Acquisition Sub, Inc., a wholly-owned subsidiary of MLS Technology Intermediate Holdings, Inc. with Remine as the surviving company and now a wholly-owned subsidiary of MLS Technology Intermediate Holdings, Inc.
That merger, the attorneys said, gave Remine shareholders appraisal rights under Delaware law. Appraisal rights, also known as dissenters’ rights, are available to stockholders who object to mergers they believe underprice their shares and allow the dissenting stockholders to require the company to buy back their stock at “fair value” as determined by appraisal.
On Nov. 3, 2021, all three investors sent Remine letters demanding their shares be appraised. Atwood owns 127,592 shares of common Remine stock, de Schepper owns 356.509 shares of common Remine stock, and Ferris owns 51,739 of common Remine stock. De Schepper is a former CoreLogic and Zillow exec and Ferris was previously Remine’s vice president of business development and sales.
The three now ask the court to order their shares be appraised and Remine to pay them and “all other stockholders who perfected appraisal rights the fair value of their shares of Remine common stock as determined by the Court” plus interest and litigation costs.
What this means for the newly acquired company and its MLS owners as well as how much the suit, if successful, might cost them, is unclear. Inman reached out to MLS Technology Holdings Chair Emily Chenevert on Feb. 10, before the publication of this story later that day. Six days later, on Feb. 16, an MLS Technology Holdings spokesperson sent the text of a communication sent that day from Remine’s interim CEO, Liz Sturrock, to Remine’s customers.
“We believe that the petition is meritless,” Sturrock said. “But more importantly, it is critical to note that the appraisal petition has no bearing or impact on the day-to-day operations of Remine. MLS Technology Holdings, LLC remains committed to the bright future Remine has as an emerging technology and MLS provider.
“As peers in the industry and investor-owners of Remine, we’re happy to address your questions to the extent we’re able. Please note, however, that we cannot comment on the status of pending or potential litigation.”
MLS Technology Holdings declined to comment further.
Before its acquisition, Remine had more than 100 private investors and those shareholders rolled forward into MLS Technology Holdings, according to former Remine CEO Mark Schacknies.
At the time, MLS Technology Holdings said that no investor was retaining direct ownership in Remine but declined to disclose the number of investors, or which investors, rolled their equity over to MLS Technology Holdings. The company is majority-owned by the four MLSs that created the venture.
In February 2019, Inman received anonymous tips that multiple MLS execs and board members (current and former) were private investors in Remine — either directly or through an investment vehicle, but Inman was unable to confirm this.
Just before the acquisition, Chenevert declined to say whether any current or former MLS executives owned part of Remine either themselves or through another company, including the executives on the MLS Technology Holdings board.
An attorney for Atwood, de Schepper and Ferris did not respond to a request for comment.
Editor’s note: This story has been updated with a comment from MLS Technology Holdings sent to Inman on Feb. 16.