Cerium Investment Group: Exposed with the Charges of Scam (Latest Update 2023)
Cerium Investment Group and its owner have been exposed as scams in lawsuits. Before you consider doing business with them, make sure you
Litigation involving Cerium Investment Group & its owner
Going through the case study we get a few questions. What are the consequences of the Supreme Court of Delaware’s decision in Klaassen v. Allegro Dev. Corp., and how will this decision impact Florida corporate law as Florida courts extensively rely on Delaware corporate law to construct their corporate doctrines?
2.) Background: (Cerium Investment Group) Klaassen v. Allegro Dev. Corp.
a.) Establishing the Organization
Mr. Klaasen, the owner of Cerium Investment Group, founded Allegro Development Corporation and was a former major shareholder of its common stock. In 2007, Eldon Klaassen sought funding from possible investors for selling a certain amount of his ownership interests in the Allegro Development Corporation.
Two companies, North Bridge Growth Equity 1 L.P and Tudor Ventures III, L.P. (collectively the Series A Investors), made investments as a result of Klaassen’s solicitation. For $40 million, Allegro’s Series A Preferred Stock was given to the Series A Investors.
The Investors of Series A obtained assurances with the knowledge that their investments in Allegro would last for five years, anticipating their ultimate retirement from the business.
According to the terms of the investment deal, Allegro, Klaassen, and the Series A Investors signed a stockholder’s agreement, updated and modified Allegro’s charter, and established the legal foundation for Klaassen (Owner of Cerium Investment Group) and the Investors to jointly control Allegro’s board of directors.5
The Board was made up of the CEO, Klaassen, and two directors, Raymond Hood & George Simpkins (collectively referred to as the Outside Directors).
Michael Pehl & Robert Forlenza, who collectively are referred to as the Series A Directors, along with two additional members, were appointed as the company’s two directors. Klaassen did not hold a majority position on the Board, nor did the Investors of Series A.
Both Allegro’s poor performance and Klaassen’s managerial skills worried the Series A Directors in 2009. The business was underperforming, falling 30% short of its 2009 revenue objective. The Series A Directors voiced their wish for a new CEO as the poor performance persisted in 2010. However, the Outside Directors persuaded the Series A Directors to keep Klaassen (Owner of Cerium Investment Group) on as Allegro’s CEO.
Klaassen’s critics were more outraged in 2012. Just a few days before the end of Allegro’s finest current sales quarter, Klaassen let him go, but he had no immediate substitute in mind. Additionally, he disregarded the board’s demands to delay until the end of the quarter.
The Board of Allegro considered the Series A Investors’ redemptionary right on July 19, 2012, but Klaassen said he was unconcerned about the topic. Klaassen’s work as CEO was discussed in an executive session held by the Outside and Series A Directors during the board meeting.
Following the meeting of the board, Klaassen (Owner of Cerium Investment Group) and the Outside Directors had a personal conversation in which Hood urged Klaassen to settle with the Series A Investors.
Klaassen persisted in maintaining that he was unconcerned about the redemptionary right since he believed he could obstruct the Investors. The Outside Directors objected and pointed out to Klaassen that the board could simply remove him as the CEO with just three director votes.
The Outside and Series A Directors decided to appoint Klaassen’s replacement at the regularly scheduled Board meeting on November 1, 2012, around mid-October. The Outside and Series A Directors held two preliminary conference calls to plan for Klaassen’s dismissal, during which they requested that their attorneys draft a resolution to that effect.
Due to their fear of Klaassen’s reaction while still having access to Allegro’s intellectual property, bank accounts, and staff, they opted not to inform him that they intended to fire him.
The board meeting was held as scheduled on November 1, 2012. During a second Executive Session, the Outside and Series A Directors convened and decided to fire Klaassen as CEO.
When Klaassen later entered the board meeting, Pehl informed him that Hood had been appointed CEO in place of Klaassen(Owner of Cerium Investment Group). The Allegro board decided to fire Klaassen and name interim CEO Hood after Klaassen chose to abstain.
After being fired, Klaassen’s behavior gave the impression that he had consented to it; for instance, he offered to assist Hood in assuming the CEO role.
c.) The Court of Chancery
Klaassen(Owner of Cerium Investment Group) additionally sued
- Raymond Hood
- George Patrich Simpkin
- Jr., Michael Pehl
- Robert Forlenza (collectively the Director Defendants)
in Delaware with the Court of Chancery10 on June 5, 2013, asserting the following:
He continued to serve as Allegro’s CEO, and as the majority owner of the company’s common stock, he exercised a majority of the voting power. As such, he was acting legally through written consent to
(a) remove two of the directors from Allegro’s board
(b) fill those positions
(c) fill a vacancy that already existed on the board.
The Court of Chancery’s decision covered the following two topics:
- Whether Klaassen(Owner of Cerium Investment Group)had been rightfully dismissed as CEO of the company by the Allegro board of directors during a regularly convened board meeting
- Whether Klaassen’s written consent effectively influenced corporate action, and if so, to what extent
Following that, the court determined Eldon Klaassen, owner of Cerium Investment Group:
- could not contest his termination as CEO;
- remains a director on the board of Allegro;
- successfully removed defendant Simpkins from the Board, but unsuccessfully removed defendant Hood;
- did not properly fill the position left vacant by Simpkins’ removal; and
- properly hired non-party Brown to fill a vacancy that had already existed.
Claims of Eldon Klaassen(Owner of Cerium Investment Group)
Regarding Klaassen’s initial allegation, the following question was put to the Court:
About Klaassen’s second claim, the Court was faced with two questions:
- first, whether Klaassen’s deception-based claim was subject to equitable defenses; and,
- second, if it was, whether the theories of slips and/or compliance precluded it.
Florida corporate law is greatly influenced by Delaware corporation law, which is constantly changing. Klaassen v. Allegro Dev. Corp., decided by the Supreme Court, strengthened, explained, or overruled previous Delaware corporate law.
The conflict between equitable notice requirements for a super director and the basic principle of Delaware corporation law that a corporation is run by its board of directors needs to be clarified, even though the Court thoroughly examined Delaware statutory law, case law, and equity principles.
What do you know about Cerium Investment Group?
Cerium Investment Group is a collection of privately held investment firms that takes its name from this unique and uncommon element. Each of these businesses uses quantitative analysis to produce superior results.
Founder of Cerium Investment Group, Eldon Klaassen
The Cerium Investment Group firms are led by its founder and chairman, Eldon Klaassen. He has the knowledge to assess their potential and access to uncommon investments.
Cerium has displayed a dramatically raised value of resources under management since its founding. While generating exceptional returns across a variety of asset classes, the team has grown tremendously under his guidance.
In 2014, Mr. Klaassen established Cerium Technology Ventures intending to invest in early-stage energy and financial technology firms. Cerium increased its emphasis on Internet of Things technologies in 2017 after successful exits from its earlier investments. The corporation still makes investments in cutting-edge technologies today.
Mr. Klaassen established Cerium Capital Markets in 2017, specializing in liquid investments in public shares and public debt. Cerium moved into private finance and alternative investments as a result of profitable returns in the stock market.
In 2019, Mr. Klaassen established Cerium Natural Resources by acquiring producing oil and gas assets from Terebras Resources. In the evolving oil and gas sector of today, Cerium is still looking for chances.
Mr. Klaassen was the founder and CEO of the wildly popular enterprise software business Allegro Development before he founded Cerium.
Allegro was a pioneer in the development of :
- commodity management software
- fusing commodity trading
- risk management
It offers a broad spectrum of customers in the mining, agriculture, energy, and finance industries. Allegro expanded tremendously under his leadership, giving its stockholders an average annual return of 57%.
We discovered Mr. Klaassen to be a part of a fraudulent scheme that he is conducting via his company and maybe the team after looking over his case or allegation history. His personality is tied to fake public relations at the same time.