A law office recently announced that it is investigating the sale of a financial company after shareholders brought forth allegations of state law violations and fiduciary duty breaches. There is a chance that this could become a securities class action lawsuit in the future.
Law firm Brodsky and Smith, LLC, noted that the investigation will center around the board of directors of FedFirst Financial Corp., after they agreed to sell the company to CB Financial Services, Inc. If the pending deal goes through, shareholders of FedFirst would receive just $23 in cash for each unit of stock. There also is an option to receive shares of CB Financial Services, but this would give stockholders approximately 1.15 shares of the new company's stock for the ones they already own. Furthermore, this would give 65 percent of all outstanding shares of FedFirst stock into the new stock, while the remaining amount would be paid out in cash.
With these issues in mind, there is a potential for law violations and fiduciary duty breaches due to business leaders not looking out for the best interests of those who own stock. This is because there may be an undervaluation in the deal, while a number of conflicts of interest also may have occurred. Some of the business leaders at FedFirst Financial will be headed to various high-level jobs at CB Financial Services.
It is an option for shareholders to contact the law office to learn more about the investigation, as well as how the process may affect their rights and interests. Both Evan Smith and Jason Brodsky are available to talk about these matters, and they can be reached at no cost by email, mail or telephone. The law firm's website also has further information that may benefit shareholders.
Second investigation begins
Another law office noted that it will also look into the pending deal for many of the previously mentioned reasons. This also may be a class action claim, depending on the result of the action.
Both Powers Taylor, LLP, and former Securities and Exchange Commission attorney Willie Briscoe noted they will look into the deal, which was worth close to $54.5 million.
Shareholders are also welcome to speak with these firms to learn more about the process, and they can be reached by telephone or email.