Streaming company RealNetworks Inc., founder and CEO Robert Glaser, and six other directors must face a proposed class action over the board’s recommendation that shareholders approve Glaser’s bid to buy the company’s outstanding shares.
Strougo v. RealNetworks Inc. et al., No. 24-cv-297, 2026 WL 221507 (W.D. Wash. Jan. 13, 2026).
U.S. District Judge Kymberly K. Evanson of the Western District of Washington denied RealNetworks’ motion to dismiss Jan. 13, saying the shareholder suit adequately alleges that the company lowered its financial projections to make Glaser’s buyout offer appear fair.
A redacted version of the order, which was provisionally issued under seal, became available Jan. 28.
Suit: Misleading financial projections
Glaser announced in a November 2021 board meeting that he was considering buying all RealNetworks’ outstanding shares, according to an amended complaint filed by lead shareholder Richard Brender. The board then formed a special committee to negotiate the proposed acquisition, the complaint says.
In preparation for Glaser’s proposal, the board approved three-year financial forecasts in January 2022, the suit says. RealNetworks did not disclose the figures, but Glaser told investors in February 2022 that he expected “double digit overall growth.”
Two months later, however, Glaser told the board he could not obtain financing for the deal, according to the complaint. He later proposed funding it himself, offering in May 2022 to acquire RealNetworks for $0.67 per share.
But the special committee declined to endorse the offer, prompting Glaser and special committee Chairman Bruce A. Jaffe to prepare “updated” financial projections that reduced the January estimates, the complaint says. The company again did not publicly disclose the projections.
After negotiating with the special committee, Glaser proposed a buyout at $0.73 per share, the suit says. The special committee approved the offer in July 2022. The board issued a proxy statement recommending that shareholders approve the deal, along with a third round of financial projections, which the board assured investors RealNetworks had prepared “in good faith.”
Shareholders approved the deal, and it closed in December 2022. But Glaser and his management team manipulated the projections to justify a lower buyout price, omitting earlier, more optimistic forecasts, Brender says.
Case proceeds
RealNetworks moved to dismiss the case in a sealed motion filed in February 2025, arguing that the investors’ claims belonged to the company, so they lacked standing to bring a direct action.
The company also said the safe harbor for forward-looking statements protected its projections, and the amended complaint did not plead sufficient facts to show that the projects were prepared in bad faith.
Judge Evanson rejected RealNetworks’ standing argument, saying the investors had asserted direct injuries from the board’s misrepresentations, not an injury to the company.
The judge also ruled that the safe harbor did not protect the projections because, although they are forward-looking, the complaint contests the board’s claim that they were prepared in good faith, not the projections themselves.
The complaint adequately alleges that the projections were not prepared in good faith, Judge Evanson wrote, noting allegations that RealNetworks had prepared two projections that were inconsistent with those in the proxy statement.
Brender, represented by Juan E. Monteverde of Monteverde & Associates PC, seeks unspecified damages, disgorgement, interest and class certification. He claims the defendants violated Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C.A. §§ 78n(a) and 78t(a).
Shane P. Cramer and Randall T. Thomsen of Bryan Cave Leighton Paisner LLP represent RealNetworks.