New Jersey investor Michael Wolin accused Caterpillar chairman Douglas Oberhelman, chief financial officer Edward Rapp and thirteen directors of breaching their fiduciary duties to the company by failing to heed “red flags” during the deal.

“The red flags clearly show that Siwei was being overvalued by Caterpillar senior management, including Rapp and Oberhelman,” Wolin said in the complaint filed yesterday in the Illinois Northern District Court.

The board “blindly acceded” to the acquisition, he said according to Bloomberg.

Caterpillar acquired ERA and its subsidiary Zhengzhou Siwei Mechanical and Electrical Manufacturing (Siwei) from China-based Mining Machinery for $653.4 million in June 2012.

Caterpillar subsequently reported in January that it had found "deliberate, multi-year, coordinated accounting misconduct" at Siwei and announced a $580 million write-down on the acquisition.

In the complaint Wolin said the board should have considered the company’s aging receivables and its need for “an immediate $50 million cash infusion” to continue operating before the deal was closed.

The allegations are based on documents Caterpillar provided to Wolin’s lawyers after they demanded to inspect the company’s books and records after the January write-down.

The Illinois-based OEM giant told Bloomberg it didn’t comment on pending litigation.

Wolin is seeking a court finding that the individual defendants failed to protect the company’s interests and an award of damages payable to Caterpillar.