Within hours of CEO Jeff Smulyan and JS Acquisition announcing a bid to take Emmis Communications private, class action law firms were tripping over each other to be first to the courthouse.
No fewer than five of the securities law class action law firms announced publicly that they are “investigating” the deal for possible grounds to sue.
For example, Tripp Levy PLLC noted that Smulyan had made a previous bid to take Emmis private at $15.25 per share. That offer was dropped in August 2006. The current offer is for $2.40 per share, which is above the recent trading price.
“However, Emmis may not have adequately shopped itself around before entering into this transaction and, pursuant to this proposed transaction, Smulyan may be underpaying for Emmis, thus unlawfully harming Emmis shareholders,” said Tripp Levy in its announcement to attract Emmis shareholders as clients. “The investigation concerns, among other things, whether the consideration to be paid to Emmis shareholders is grossly unfair, inadequate, and substantially below the fair or inherent value of Emmis. The investigation further concerns whether the directors of Emmis may have breached their fiduciary duties by not acting in Emmis shareholders’ best interests in connection with the sale process of Emmis,” the announcement said.
“The law firm of Wolf Haldenstein Adler Freeman & Herz LLP is investigating possible breaches of fiduciary duty by the Board of Directors of Emmis Communications Corporation arising out of the Letter of Intent entered into by JS Acquisition, Inc. and Alden Global Capital, a 42% shareholder of Emmis Preferred Stock,” said another of the law firm announcements.