Dive Brief:

• Camping World shareholders last week sued the company, its CEO Marcus Lemonis, part-owner private equity firm Crestview Partners and other executives for making "materially false and misleading statements" regarding the company’s financial results and the success of its integration of recently acquired Gander stores, according to court documents filed in U.S. District Court.

• The shareholders claim that what they allege were management’s "misrepresentations" amounted to "massive insider selling scheme."

• Lemonis ultimately corrected the company’s earlier characterization of the store roll-out and its finances, which led to a stock tumble and a sharp hit to shareholders, while executives themselves were spared, according to the complaint. "At the same time that defendants were misleading investors, company insiders, including certain of the defendants, sold over $530 million worth of Camping World Class A shares at artificially inflated prices," the plaintiffs wrote.

Dive Insight:

After acquiring Gander Mountain during that retailer's bankruptcy, Camping World scaled back its footprint, but the decision was hardly a reflection of limited ambitions. Along with fewer stores and a new banner, Camping World closed Gander stores or opened stores with smaller capacity — 30,000-50,000-square feet as opposed to 60,000-80,000-square feet.

From the get-go, Camping World Chairman Marcus Lemonis insisted that stores be profitable and well-managed in order to re-open. Meanwhile, the company has been in expansion-through-acquisition mode, announcing five new acquisitions with six locations across five states in the first quarter alone.

But the shareholders suing the company said that confidence went too far, and Lemonis knew it. 

"During a quarterly conference call, defendant Lemonis characterized the behind-the-scenes chaos in the rollout of the Gander stores as a 'giant s--t show,' belying his earlier statements that initial store openings had demonstrated 'very promising' trends and been 'unbelieveabl[y]' well managed," the court documents read. "Ultimately, defendant Lemonis would admit that he had made 'mistakes' in his communications with investors and that he was unprepared to make fulsome disclosures after taking Camping World public because, as he put it, he was 'used to holding all my cards so I can sucker punch my competitor.'"

The shareholders are requesting a jury trial and certification of the suit as a class action.