B. Riley Board Beats Investor Suit Over Alleged PE Fraud Tie (1)

Bryant Riley and other leaders of his investment bank prevailed Tuesday against litigation blaming them for losses tied to the bankruptcy of Franchise Group Inc., founded by a friend of Riley’s with links to a fraud scandal.

A Delaware Chancery Court judge rejected claims that the former B. Riley Financial Inc. board turned a blind eye to red flags about Brian Kahn, a Prophecy Asset Management LP founder later described in court filings and news reports as a co-conspirator involved in securities fraud there. The idea that B. Riley’s directors had a duty “to monitor the internal compliance of ...