According to the Complaint filed July 5, 2011, the plaintiffs allege that the defendants breached fiduciary duties and violated Federal Securities laws during a proposed merger. On February 23, 2011, the company announced a proposed acquisition whereby the acquiring company would attain all outstanding publically held units in a stock-for-stock merger. The total cash value of the merger was approximately $42 per unit for the company’s unit holders. The acquiring company qualified as a “Group Member” under the target company’s limited partnership agreement.
The plaintiffs claim that the individual defendants did not hire a financial advisor to evaluate the proposal until after the announcement, despite knowing about the pending offer. During the course of the next two months, the defendants evaluated the proposed offer and decided to propose a counteroffer to the acquiring company seeking a higher exchange rate. The acquiring company rejected the initial counteroffer and any subsequent attempts at negotiation. According to the Plaintiff’s complaint, despite these events, on April 26, 2011, the defendants issued a statement that the original offer was fair, reasonable, and in the best interests of the company’s unit holders. The defendants subsequently approved the merger agreement. In drafting its S-4 statement detailing the reasons for entering the merger agreement, the defendants failed to disclose certain analyses generated by its investment banker concerning the acquiring company’s valuation.
The plaintiffs allege that the relationship between the target and acquiring company coupled with the unfair price violated Section 14(a) of the Exchange Act and Rule 14a-9. Further, the complaint alleges violations of Exchange Act Section 20(a) for the absent analyses of the target company’s investment banker.
On August 23, 2011, the parties agreed to a stipulation to dismiss this action without prejudice. On the next day, the Court issued an Order dismissing this action.