A lawsuit filed by VK Investments claims Repairify’s Executive Chairman John Lindle has breached his fiduciary duty and failed to appropriately perform management responsibilities including attending leadership meetings. 

VK Investments is a minority member of Repairify Holdings, which is majority-owned and controlled by Kinderhook, according to suit. The suit is filed derivatively on behalf of Repairify and also against Repairify, Kinderhook, Paul Cifelli, Kinderhook’s managing director and Lindle. 

Kinderhook and Cifelli filed a motion to dismiss the complaint Monday stating that a derivative claim is a company asset and whether and how to pursue it is a decision to be made by the directors of a corporation or the managers of an LLC. It states a plaintiff must plead with particularity that making a demand to bring the litigation would be futile, such that demand is excused. 

The motion to dismiss claims VK Investment failed to make a demand and thus faces the heavy burden of pleading with specificity that Repairify is incapable of protecting itself. 

“Rather than alleging with specificity that demand would be futile, the Complaint recites a series of irrelevant personal grievances and a desire to liquidate a position in a company that plaintiff does not control,” the motion states. 

Repairify Holdings and Repairify Inc also filed a motion Monday to join Kinderhook and Cifelli’s motion to dismiss. Lindle is not listed on either of the motions. 

The original complaint alleges Lindle failed to appropriately supervise and direct senior management and “imprinted on Repairify a haphazard strategic path accentuated by a churn through management personnel, all while disengaging from Repairify.” 

It also claims Lindle has systematically hired unqualified friends and relatives. 

“Further, Lindle has engaged in pervasive self-dealing, draining Repairify’s cash to fund his and his family’s lifestyle,” the suit says. 

The suit filed in the Court of Chancery of the State of Delaware Dec. 12, also alleges that Kinderhook and Cifelli have failed to provide oversight of Lindle “but have aided and abetted and continue actively to aid and abet his fiduciary breaches.” 

“Cifelli is entangled with Lindle in multiple businesses that are unrelated to Repairify, and thus lacks independence from Lindle,” the suit says. “Far from pushing Lindle to achieve an ‘exit’ of Repairify, as a private equity manager typically would demand of a portfolio company, Kinderhook and Cifelli have enabled Lindle’s mismanagement.” 

Kinderhook’s motion states the complaint does not identify Repairify’s board of directors. 

“Even if the Complaint’s allegations were particularized and well pleaded as to Cifelli and Lindle, they represent only 2 of 7 current Repairify HoldCo board members and just 6 of 15 votes of the current members of the board of Repairify HoldCo,” the motion says. 

The motion claims that the VK Investment’s allegations that Cifelli is interested and lacks independence fall short of what is required to make the complaint under Delaware law. 

The suit alleges that Kinderhook is seeking to protect a “paper gain” in its fund that holds Repairify. It describes Repairify as an artificially inflated value. 

“In order to avoid revealing to Kinderhook’s fund investors that Repairify’s value has been eroded by Lindle, Kinderhook is blocking any sale of Repairify at its true market value,” the suit says. 

Kinderhook’s motion states VK Investments fails to plead that Cifelli and Kinderhook were aware of Lindle’s alleged mismanagement, or participated in it. It states Cifelli was a director of Repairify, not an officer with responsibility for day-to-day operations. 

“And the Complaint offers no coherent reason why Kinderhook would knowingly assist an officer in mismanaging and enriching himself at the expense of a company in which it owns a majority interest,” the motion says. 

Maurice Tuff, the controller of VK Investments, created BlueDriver, which is a vehicle diagnostic repair tool that uses wireless communication between vehicles and iPhone and Android devices. 

The suit claims Repairify purchased BlueDriver in 2021 with a condition of the deal to be that Tuff allocated of portion of the purchase price to an investment in the membership interest of Repairify. It alleges that Tuff was resistant to using his funds for a membership interest but agreed to because Kinderhook and Repairify told him that the sale of Repairify was imminent and would occur at a higher value. 

Tuff also agreed to serve as Repairify’s chief technology officer, the suit says. He also assumed the role of chief marketing officer. 

While working at Repairify, the suit alleges, Tuff learned that the business EBITDA and revenue do not support a valuation 3M invested in early 2021. 

“To the extent that valuation was based on the assumption that Repairify would grow rapidly, that assumption has proved unfounded given Lindle’s mismanagement,” the suit says. “Currently, there is no prospect of Repairify being sold.” 

It alleges Lindle has abandoned management responsibilities. It says he has not attended meetings of the executive leadership team for years. It also says that Lindle is not in regular contact with Repairify’s senior management, including Repairify’s chief financial officer. 

The suit also says that Lindle has hired his brother and daughter to work at Repairify, without either of the family members being qualified for the jobs. 

“Lindle has installed friends and family members who lack relevant qualifications and experience in management positions and has caused Repairify to pay them inflated salaries,” the suit says. 

Lindle’s management style is blamed in the suit for a constant turnover in the company’s senior executives. It claims Repairify’s senior executive Julian Soel, chief operating officer, was terminated in April 2022, Tuff was terminated in April 2023, Tony Rimas, co-president, was terminated in April 2023 and Chris Hollingsworth, co-president, was terminated in June 2024. 

The suit alleges that Lindle has been “engaged in numerous related-party transactions and self-dealing.” This includes Repairify paying rent for his residence in Key West held in the name of Steel City Motors, LCC, an entity that Lindle controls. The suit says Repairify does not own an office in Key West. 

Lindle also “arranged’ for Repairify’s devices to be stored in a warehouse owned by another of Lindle’s companies, the suit claims. It also alleges that Lindle runs expenses from other companies through Repairify and books travel for other companies as Repairify travel. 

“According to the suit, Kinderhook holds its investment in Repairify in a Kinderhook fund which has a “paper gain.” 

“That “paper gain” is critical to the fund’s performance as it has been communicated to Kinderhook’s fund investors,” the release says. “However, given the significant erosion of Repairify’s value and growth prospects since early 2021 because of mismanagement and conflicts of interest, the paper gain in the Kinderhook fund would be reduced or eliminated if Kinderhook sold Repairify.  In order to protect itself and to prevent its own fund investors from discovering that the fund’s performance had declined, Kinderhook and Cifelli are blocking any sale of Repairify at its true market value.”

The suit claims that Repairify received offers to purchase the company or portions of the company in recent years.

Kinderhook’s motion states Repairify sought to further grow the business in advance of a possible sale following the acquisition of BlueDriver. 

“After Repairify’s acquisition of BlueDriver, certain potential buyers approached Repairify and Kinderhook,” the motion says. “Kinderhook, as the majority owner of Repairify, determined not to pursue those inquiries at that time. As Cifelli had previously explained to Tuff, Kinderhook would like to see further growth in the value of Repairify before seeking to sell Repairify.” 

The motion also states that under Delaware law, Kinderhook can choose to not sell its interest or approve a sale of the company for its own reasons. 

“Kinderhook’s exercise of that authority—directly or through Cifelli—does not constitute illegal conduct,” the motion says. 

VK Investments also fails to alleged any injury from the lack of a sale, the motion says. 

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