Cerium Investment Group Sued for Fraud (2025 Update)

Originally Syndicated on April 20, 2023 @ 7:36 am

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.

The investment contract stipulated that Allegro, Klaassen (Owner of Cerium Investment Group), and the Series A Investors would all sign a share holder’s agreement, update and modify Allegro’s charter, and create a legal framework for Klaassen (the owner of Cerium Investment Group) and the Investors to jointly control Allegro’s board of directors.5

The CEO, Klaassen, and two directors, Raymond Hood, and George Simpkins (also referred to as the Outside Directors), made comprised the Board.

The organization’s two directors, Michael Pehl, and Robert Forlenza, also known as the Series A Directors, were chosen together with two other members. Neither Klaassen nor the Series A Investors held an overwhelming seat on the board of directors. 

The Chancery Court

Additionally, Klaassen (Owner of Cerium Investment Group) filed a lawsuit. 

• Allegro
• Raymond Hood,
• Simpkin, George Patrich
• Michael Pehl Jr.

On June 5, 2013, Robert Forlenza filed a lawsuit in Delaware with the Court of Chancery10, stating the following:

As the main owner of the company’s common stock, he continued to lead Allegro as CEO and held almost all of the voting rights. He was therefore acting lawfully by giving his written agreement to

• discharge two members from the board of Allegro
•  to fulfill those roles.
•  fill a position that was open on the board.

Two subjects were covered by the Court of Chancery’s ruling:

Whether Klaassen (Owner of Cerium Investment Group) had been properly eliminated from his position as CEO of the business by the Allegro board of directors in a duly called board meeting.

Whether or if Klaassen’s written approval had a significant impact on the company’s decision, and if so, how much.

Eldon Klaassen, the proprietor of Cerium Investments Group, was found to have the following:

• Could not appeal being fired as CEO;
• Remains a director on Allegro’s board;
• Defendant Hood was subsequently expelled from the Board, while defendant Simpkins was successful;
• Failed to fill Simpkins’ vacated post in a suitable manner; 
• Appropriately employed Brown, a non-party, to fill an opening which previously established.

Who is Eldon Klaassen?

Eldon Klaassen, the chairman and founder of Cerium Investment Group, is in charge of its businesses.  In addition to having access to unusual assets, he is knowledgeable enough to evaluate their potential.  

The value of the resources Cerium controls has dramatically increased since its founding. Under his leadership, the organization has expanded significantly while producing great returns over a range of different types of assets.

To invest in early-stage energy and financial technology companies, Mr. Klaassen founded Cerium Technology Ventures in 2014.  Despite profitable exits from its prior investments, Cerium focused its focus on Internet of Things technology in 2017.  Even now, the company keeps making investments in cutting-edge technology.

Before starting Cerium, Mr. Klaassen served as the founder and CEO of the enormously well-liked corporate software company Allegro Development.  

The creation of Allegro was a pioneer.

• Commodities management applications 
• Combining commodities trading
• Management of risk
• Logistics  
• Financials

The mineral extraction, agricultural, energy, and finance sectors are just a few of the industries it serves. Allegro saw rapid growth under his direction, providing its owners with an average annual return of 57%.

Eldon Klaassen, the owner of Cerium Investment Group, has made several claims.

The following query was posed to the Court in relation to Klaassen’s original accusation:

The Court had to decide two issues regarding Klaassen’s second claim: 

• The first was whether Klaassen’s subterfuge-based claim was susceptible to equitable defenses; 
• Secondly, if it was forbidden by slips and/or conformance principles

Case Resolved

Delaware company law, which is continually evolving, has a significant impact on Florida corporate law. The Supreme Court’s ruling in Klaassen v. Allegro Dev. Corp. strengthened, clarified, or invalidated earlier Delaware corporation law. 

Even though the Court carefully considered Delaware statute law, case law, and equity principles, the discrepancy between fair notice standards for a mega director and the fundamental premise of Delaware corporation law that a corporation is managed by a committee of directors has to be explained.

Cerium Investment Group refers to a grouping of independently owned investment companies.  Each of these companies uses quantitative analysis to get improved outcomes.

The Bottom Line 

After reviewing Mr. Klaassen’s (Owner of Cerium Investment Group) case or accusations in the past, we learned that he is engaging in a fraud through his firm and maybe the team.  His character is also linked to phony media relations.