A law office announced the investigation of a financial company purchase after issues related to fiduciary duty breaches arose. This could become a class action claim, depending on its outcome.
Shareholders of Nicholas Financial, Inc., recently requested that Brodsky and Smith investigate the company's purchase by Prospect Capital Corporation. This is because the terms of the transaction will give those who own Nicholas Financial Stock just $16 per share in cash. Due to this potentially undervaluing the company, it is possible there was a breach of fiduciary duty as well as other state law violations.
The board of directors may not have done business in the best interests of shareholders in this situation, and due to this, there may be an insignificant improvement or even a loss by those who have interests in the company.
On Oct. 25, 2013, the company's stock traded at $17.20 per share, which was significantly higher than the sales price agreed to in the deal. On Nov. 27, the trading value was $16.04.
For those shareholders of Nicholas Financial who are curious about the legal issues related to the purchase or the investigation itself, it is possible for the law firm to field questions. There is no cost to do this, and speaking to Evan Smith or Jason Brodsky is best. The law firm members can be reached by email, phone or mail, while there is also information about the investigation on the firm's website.
Additional investigation begins
Another law office is seeking to see if shareholders were not properly compensated in this transaction, and this action may also become a class action lawsuit, depending on the investigation's outcome.
Faruqi and Faruqi, LLP, partner Juan Monteverde will look into the purchase of Nicholas Financial by Prospect Capital to determine if there was a breach of fiduciary duty. The transaction was worth close to $199 million. The sales process may not have been fair, and the firm aims to see how much, if at all, shareholders were undervalued.
Individuals who own stock in Nicholas Financial can speak with the law firm to address questions and concerns. This can include the investigation itself, as well as how to protect investments and related issues. Checking the website for more information is possible, while speaking with Monteverde by email or telephone is also an option.