Copyright The Oregonian
The founder of Portland software company CollegeNET has sued the business’ new majority owner for $350 million, alleging the private equity firm misled him before the sale and then fired him less than six months later when he objected to the way the new owner ran the company. The investment firm, Colorado-based Rubicon Technology Partners, has not filed a reply to the litigation and did not respond Tuesday to a message seeking comment. In the world of mergers and acquisitions, it’s not unusual for business founders and entrepreneurs to object to the way new owners run their businesses. But in this case, the breakdown was especially quick. CollegeNET, founded in 1977, provides software to help colleges schedule classes and other campus events. The lawsuit said the Portland company employs 125, four-fifths of them at its headquarters in the Fox Tower downtown. Founder Jim Wolfston began looking to take on minority investors last year, according to the complaint filed last week in Multnomah County Circuit Court. The lawsuit said he wanted to pay down debt so CollegeNET could invest in new products and, eventually, bring his company’s value into the billions of dollars. A broker connected Wolfston to Rubicon, which sought to buy a majority stake in CollegeNET. The suit says Wolfston agreed to sell 65% of the business to Rubicon and retain 35% for himself after receiving assurances that he would continue leading the business. “Rubicon is backing the existing CollegeNET management team to pursue the next phase of the company’s growth,” the investment firm wrote in a December 2024 message cited in the suit. “An important part of Rubicon’s strategy is to ensure that management remains its partner throughout its ownership of the business and has incentives for its success that are aligned with those of Rubicon.” The companies announced their deal in March 2025. The lawsuit doesn’t disclose what Rubicon paid for its 65% stake in CollegeNET but it says the Portland company had previously been valued at $150 million. The suit says Wolfston turned down a bigger offer than Rubicon’s because the other, unnamed bidder, said it planned to cut costs rather than investing in the business. Once Rubicon had a majority stake, though, Wolfston’s suit alleges that the new owner blocked his efforts to develop new products and implemented its own cost cuts. Rubicon undertook other initiatives, according to the suit, that conflicted with CollegeNET’s client agreements. The suit alleges that Rubicon fired Wolfston on Aug. 5, locking him out of CollegeNET’s office after he raised concerns about how the firm was running the company. The suit says Rubicon accused him of having “disparaged” the investment firm and committing “gross misconduct.” The suit accuses Rubicon of violating Wolfston’s employment agreement and interfering with his relationship with CollegeNET. It demands back pay, the return of personal emails, property and memorabilia from his time at CollegeNET, and says Wolfston will seek punitive damages.
