A law firm recently began investigating a medical device company after shareholders alerted it to potential issues with a purchase involving the company. Depending on the outcome of the investigation, there is a chance it could become a class action claim.
The law office of Brodsky and Smith, LLC, noted that it started an investigation against the board of directors at ArthroCare Corporation, Inc. This stemmed from ArthroCare's purchase by Smith and Nephew, plc. There may be multiple state law violations, as well as a breach of fiduciary duty by the board of directors at ArthroCare.
If the transaction is approved, shareholders of ArthroCare will be paid $48.25 in cash for every share that they hold. Due to the low payout, the board of directors may not have had the best interest of shareholders in mind during the process.
ArthroCare's stock also may be undervalued in the pending transaction. This is because it traded at approximately $49.84 per share on Feb. 4, 2013. Additionally, it was valued at approximately $60 per share by an analyst.
Another issue with the purchase was that the premium planned to be paid out to shareholders of ArthroCare was notably lower than other transactions of similar size during the past few years.
Those shareholders of ArthroCare who are looking to learn more about the legal issues related to the proposed purchase and subsequent investigation of the company can speak with the law firm. Both Evan Smith and Jason Brodsky are available to be reached, and stockholders can speak to them by phone or email. Inquiring about these issues is offered at no cost to the shareholder.
Second investigation begins
Another law office noted it is looking into the purchase of ArthroCare by Smith and Nephew. Like the first investigation, this also may become a class action lawsuit.
Levi and Korsinsky announced it will investigate the board of directors at ArthroCare in order to determine if it breached fiduciary duty or committed any other state law violations. The purchase of ArthroCare is worth close to $1.7 billion.
Shareholders of ArthroCare stock can speak with the law office in order to learn more about the case, as well as their rights and any other related information. Joseph Levi is available to field questions, and he can be contacted by telephone or email. The law firm's website also has information for shareholders.