Brower Piven Announces Class Action Lawsuit in Connection With the Acquisition of Smurfit-Stone Container Corporation by RockTen
February 10 2011 - 2:33PM
Marketwired
The law firm of Brower Piven, A Professional Corporation, announces
that a class action lawsuit has been commenced in the Court of
Chancery of the State of Delaware on behalf of all shareholders of
Smurfit-Stone Container Corporation ("Smurfit-Stone") (NYSE: SSCC).
The complaint alleges violations of state law by the Board of
Directors of Smurfit-Stone relating to the proposed acquisition of
the company by RockTenn ("RockTenn"). The complaint alleges that
Smurfit-Stone's Board of Directors breached their fiduciary duties
by failing to maximize shareholder value, among other things.
On January 23, 2011, the complaint states, Smurfit-Stone and
RockTenn announced that they entered into a definitive agreement
for Smurfit-Stone to be acquired by RockTenn in a transaction
valued at approximately $3.5 billion. The complaint alleges that
under the terms of the agreement, Smurfit-Stone shareholders will
receive $35 per share -- consisting of 50% cash and 50% RockTenn
stock (RockTenn will pay 0.30605 shares of its own stock, plus
$17.50 in cash, for each share of Smurfit-Stone). Although
RockTenn's acquisition price represents approximately a 27% premium
over Smurfit-Stone's closing share price on January 21, 2011, the
complaint alleges that the consideration is, in fact, comparatively
low. The complaint alleges that analysts have asserted that
Smurfit-Stone "sold-out too early," and that they are "definitely
leaving money on the table here." The complaint further alleges
that the defendants failed to negotiate any protection against the
decline in the RockTenn stock component of consideration offered to
shareholders in the proposed transaction, or even the right to
terminate the proposed transaction in the event RockTenn stock
trades below a certain level. In addition to the inadequacy of the
consideration offered to Smurfit-Stone shareholders, the complaint
alleges that the process that led to the proposed transaction
suffers from disabling conflicts of interest. The complaint alleges
that the sale of Smurfit-Stone just seven months after emerging
from bankruptcy is conveniently timed to create a windfall for
certain individual defendants and other company insiders. For
example, including stock and options that will vest automatically
with the sale of the company, the complaint alleges
defendant/Smurfit-Stone CEO Patrick Moore will walk away with total
gains of $59.5 million with the consummation of the proposed
transaction.
If you are a current owner of shares of Smurfit-Stone, you may
obtain additional information about this lawsuit by contacting
Brower Piven at www.browerpiven.com, by email at
hoffman@browerpiven.com, by calling 410-415-6616, or at Brower
Piven, A Professional Corporation, 1925 Old Valley Road, Stevenson,
Maryland 21153. Attorneys at Brower Piven have combined experience
litigating securities and class action cases of over 60 years. If
you choose to retain counsel, you may retain Brower Piven without
financial obligation or cost to you, or you may retain other
counsel of your choice. You need take no action at this time to be
a member of the class.
CONTACT: Charles Piven Brower Piven, A Professional Corporation
Stevenson, Maryland 410-415-6616 Email Contact
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