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Former Mindbody CEO loses appeal, multiplies his judgement

January 7, 2025

Rick Stollmeyer

By KAREN VELIE

A court in 2023 ordered former Mindbody CEO Rick Stollmeyer of San Luis Obispo to pay $48 million to Mindbody’s shareholders after he concocted a scheme to benefit himself while harming the shareholders. He lost an appeal last month that will likely multiply his judgement.

In the 2023 ruling, a Delaware court ordered Stollmeyer and Vista Capital to pay approximately $48 million to the shareholders because of Stollmeyer’s breach of his fiduciary duties. The trial court also determined Vista aided and abetted Stollmeyer in his scheme.

Both Vista and Stollmeyer appealed the ruling.

The Delaware Supreme Court last month affirmed the trial court’s ruling “that Stollmeyer breached his fiduciary duty of loyalty by tilting the sale process in Vista’s favor for his own personal interests in ways inconsistent with maximizing stockholder value.” It also affirmed “that Stollmeyer breached his fiduciary duty of disclosure by allowing material omissions in Mindbody’s proxy materials.”

At the same time, Vista prevailed in its claim that it did not aid and abet Stollmeyer. Which means that instead of both Vista and Stollmeyer being jointly responsible for the judgement, Stollmeyer is now on the hook for the entire $48 million plus interest and costs.

While courting Vista, Stollmeyer tanked stock prices and shared inside information with Vista, according to the trial court.

On March 15, 2023, the trial court ruled in favor of former Mindbody shareholders awarding damages of $1 per share, plus interest, or about $48 million. The court based the judgement on evidence of what Vista would have paid without Stollmeyer’s interference.

In 2018, Stollmeyer “had grown frustrated with his inability to monetize his holdings of Mindbody stock, fearful of the volatility and fickleness of the public markets, and uncertain about his ability to lead Mindbody through its next stage of its growth.”  In order to solve his problems, Stollmeyer decided it was time to sell.

Before Mindbody’s board began to search for a merger partner, Stollmeyer had already selected Vista, though he did not tell the board. Stollmeyer also failed to inform the board that he had attended a summit where he learned of the great wealth Vista delivered to former CEOs of companies they obtained.

In his appeal, Stollmeyer also sought an offset for two previous settlements he made: one for $27 million and the other for $9.75 million. The Delaware Supreme Court rejected his request.

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This loser was responsible for bringing out-of-towners into SLO to protest during the BLM insanity. The busses were parked in front of his house. SEE-YA!!!


-1

Seriously? What is the source on this information? I’d like to look into it. Those “protesters” were in my neighborhood, vandalizing and littering.


1

Stollmeyer based upon court records seemingly liked and chose Vista and brought them to town. Apparently hundreds lost their jobs thereafter.


Seems like a lot was going on for Vista around the time Stollmeyer became so impressed and their arrival in SLO.


https://www.justice.gov/opa/pr/private-equity-ceo-enters-non-prosecution-agreement-international-tax-fraud-scheme-and-agrees


https://en.wikipedia.org/wiki/Robert_F._Smith_(investor)


https://www.forbes.com/sites/antoinegara/2021/02/08/exclusive-vista-co-founder-brian-sheth-tied-to-battle-over-salacious-twitter-account-callmemoneybags/


2

From the beginning Mindbody was a sham of a company designed to go big on the IPO and turn around to sell to private equity.

Supposedly they offered scheduling software but behind the scenes the profits came from skimming off credit card transactions from their unwitting customers. Most of the customers were uneducated women with businesses like yoga studios, nail and hair salon etc. They ran a boiler room sales force firing anyone who didn’t meet the quota. They pushed small businesses into subscriptions and took a cut from every dollar made. Once the share price was high enough ol ric started shopping his shiny sham around.


There’s way more here than a simple SEC violation. The whole executive team should be investigated by the authorities.


19

Look, I’m no fan of “Slick Rick”, but at its peak, Mindbody provided decent paying jobs for over 1,500 employees locally and many of them got enriched by the generous stock grants and stock purchase plans. Those employees then spent that money in our community, boosting our local economy. I know quite a few employees that were able to stay in SLO and purchase a home thanks to the stock payout. Yes Rick got greedy and screwed the company by selling it to Vista, but it wasn’t all bad.


-3

This guy will fade away leaving this judgment unpaid while he lives off Bitcoin in some out of the way place, like Jakarta or Singapore.


14

Another defeat for the coastal liberal elitists.


11

An interesting character. It seems like he has made some very large political contributions and seemingly charitable ones as well. Personally it seems like many people got screwed on her personal dealings. I doubt they will ever see what they are entitled to receive. It’s amazing how the well connected seem to roll.


17

How can Cal Poly, French Hospital and other benefactors praise this dude and accept millions of “charitable” donations from him with any good conscience. Its seemingly other peoples money he gained control of through corrupt means as the Delaware Supreme Court Ruling reads.


Do the right thing, give the dirty donation funds back to the people they belong to.


Thank you CCN for the reporting update. Shame on the Tribune for their silence on this story of local and national significance.


21

I’m not defending Rick. But how do you suppose French Hospital can just give back money they had already been spent on the construction of a building?


4

And exactly which people should those “dirty donation funds” be given back to? The shareholders are already getting settlement money from Stollmeyer. Do you think they should get even more money back and if so, why not make Stollmeyer pay that additional money himself rather than claw it back from charities? Stollmeyer still made hundreds of millions off the sale, he has plenty left to pay.


1

He always heavily donated to Adam Hills campaigns…go figure…


33

Big business is bad business. Easy as that. Gonna get severely worse under Trump too. He himself was convicted on 34 felony counts of business fraud related to bribing a pornstar he cheated on his wife with… Your friendly reminder ;)


-67

Trump = bad = downvotes here every time. You are 100% right, but the orange menace’s cult followers are never going to believe it. They elected a billionaire who was funded by billionaires and his cabinet will be filled with billionaires with the beliefc they are all going to fix everything that is hurting the little guy and stop exploitation of workers. You have to be a special kind of stupid to believe that. I imagine his most recent discussions with his team went something like, “Let’s announce we are going to try to buy Greenland and rename the Gulf of Mexico so my followers have something to distract themselves while I rape and pillage my way through another four years.”


-31

The Tribune: telling the sheeple what to be upset about next, and how it’s all Trump’s fault.


25

This isn’t “The Tribune”… Haven’t read their paper or been to their site either. Some people have a mind of their own fyi. Unlike within the Trump cult.


-1

remind me whose decision it was to protect a fish and pull funds from LA Fire Department budgets??? asking for a friend…


12

The LA fire department budget of $800 million plus was cut by about 2%… by the mayor of LA… Inform your “friend”.

This state burns every year, this isn’t new. Remind me; who’s currently in charge right now an has done nothing but point fingers? Pathetic.


-1

Joe Biden is still in charge despite your weird obsession of Trump. Biden was more interested in talking about his sons home being threatened and becoming a great grandfather during his press conference yesterday than the tragedy in L.A


10

Gee; guess I just had January 6th in mind… Maybe you can remind me why?


2

Maybe it’s because if the irony of kamala harris swearing in trump.


2

The L.A mayor in 2021 called for Ted Cruz to resign for leaving his state during a natural disaster. She did the exact same thing by going to Africa perhaps she should follow her own advice.


14

Don’t forget David Wright formerly of the LADWP who stole nearly 40 million from the city. More fraud… But no, go ahead and blame the people that tried to save some wildlife.


3

What does trump have anything to do with the corruption involving Rick Stollmeyer and his shady business dealings? I guess you have to be a special kind of stupid to link Trump to this.


30

Trump is a fraud. Rick is a fraud. Verrrrrry simple.


5

Not really as simple as you think the voters had their say and overwhelmingly disagreed with that messaging of evil trump and anybody who votes for him are evil. But hey keep up that weird obsession if it makes you happy.


1