A recent Owens & Minor merger has the attention of class action law firms around the country. Photos by Michael Schwartz.
The lawyers are on the scent again.
Class action law firms from around the country are targeting two recently announced and still pending acquisitions involving Richmond firms, seeking unhappy shareholders willing to put their names on lawsuits that can block the deals or force potentially lucrative settlements.
The first is Richmond-based Fortune 500 firm Owens & Minor’s pending purchase of Medical Action Industries, a medical supply company in New York. The companies announced a deal in late June in which O&M would buy Medical Action for $208 million.
Almost immediately after the announcement, class action firms from New York to California took to the internet with releases announcing they were “investigating” Medical Action Industries over the deal.
Within days, two lawsuits were filed in New York Supreme Court in Suffolk County, where Medical Action Industries is headquartered. The cases each have a lone Medical Action shareholder as plaintiff and allege that the deal undervalues Medical Action to the detriment of its shareholders and should be halted. They are seeking class action status and allege breach of fiduciary duty by Medical Action and some of its directors.
O&M is named as a defendant in the cases on claims that the Mechanicville-based healthcare logistics company aided and abetted the other defendants in their breaches of fiduciary duty.
Both cases are still pending in New York could be transferred to federal court, where many class action cases are often litigated.
TowneBank bought Franklin Federal Savings last month.
O&M spokesperson Trudi Alcott said the company would not comment on the cases. Medical Action said in a SEC filing that it and the other defendants “believe that these lawsuits are without merit and intend to defend against them vigorously.”
A few weeks after targeting the O&M deal, many of the same law firms went after a big Richmond bank deal.
Their class action press releases went flying on the Web when it was announced on July 15 that Hampton Roads-based TowneBank would acquire Richmond’s Franklin Federal Savings Bank in a pending $275 million deal. Both banks are publicly traded, and at least half a dozen law firms have announced investigations in search of a lead plaintiff.
Similar to the O&M releases, law firms state they are looking into whether the TowneBank offer undervalues Franklin Federal’s parent company and whether any breaches fiduciary duty may have taken place.
No case has been filed so far related to the Franklin Federal TowneBank deal.
These cases are the latest local examples of what’s become a common practice in the wake of big merger and acquisition announcements.
The class action suits are billed as protecting shareholder rights, but also can be a major payday for the lawyers involved and a costly thorn in the side of companies trying to close a deal.
Many of these same law firms targeted StellarOne Bank last year when it was being acquired by Richmond-based Union First Market Bank. One of the firms found a StellarOne shareholder that was unhappy with the $445 million acquisition. That case was eventually settled for an untold sum.
A similar case was filed in Delaware Chancery Court this month seeking to block Chesapeake-based Dollar Tree’s recent $8.5 billion acquisition of Family Dollar, even as Dollar General is looking into challenging the deal with a bid of its own.
A recent Owens & Minor merger has the attention of class action law firms around the country. Photos by Michael Schwartz.
The lawyers are on the scent again.
Class action law firms from around the country are targeting two recently announced and still pending acquisitions involving Richmond firms, seeking unhappy shareholders willing to put their names on lawsuits that can block the deals or force potentially lucrative settlements.
The first is Richmond-based Fortune 500 firm Owens & Minor’s pending purchase of Medical Action Industries, a medical supply company in New York. The companies announced a deal in late June in which O&M would buy Medical Action for $208 million.
Almost immediately after the announcement, class action firms from New York to California took to the internet with releases announcing they were “investigating” Medical Action Industries over the deal.
Within days, two lawsuits were filed in New York Supreme Court in Suffolk County, where Medical Action Industries is headquartered. The cases each have a lone Medical Action shareholder as plaintiff and allege that the deal undervalues Medical Action to the detriment of its shareholders and should be halted. They are seeking class action status and allege breach of fiduciary duty by Medical Action and some of its directors.
O&M is named as a defendant in the cases on claims that the Mechanicville-based healthcare logistics company aided and abetted the other defendants in their breaches of fiduciary duty.
Both cases are still pending in New York could be transferred to federal court, where many class action cases are often litigated.
TowneBank bought Franklin Federal Savings last month.
O&M spokesperson Trudi Alcott said the company would not comment on the cases. Medical Action said in a SEC filing that it and the other defendants “believe that these lawsuits are without merit and intend to defend against them vigorously.”
A few weeks after targeting the O&M deal, many of the same law firms went after a big Richmond bank deal.
Their class action press releases went flying on the Web when it was announced on July 15 that Hampton Roads-based TowneBank would acquire Richmond’s Franklin Federal Savings Bank in a pending $275 million deal. Both banks are publicly traded, and at least half a dozen law firms have announced investigations in search of a lead plaintiff.
Similar to the O&M releases, law firms state they are looking into whether the TowneBank offer undervalues Franklin Federal’s parent company and whether any breaches fiduciary duty may have taken place.
No case has been filed so far related to the Franklin Federal TowneBank deal.
These cases are the latest local examples of what’s become a common practice in the wake of big merger and acquisition announcements.
The class action suits are billed as protecting shareholder rights, but also can be a major payday for the lawyers involved and a costly thorn in the side of companies trying to close a deal.
Many of these same law firms targeted StellarOne Bank last year when it was being acquired by Richmond-based Union First Market Bank. One of the firms found a StellarOne shareholder that was unhappy with the $445 million acquisition. That case was eventually settled for an untold sum.
A similar case was filed in Delaware Chancery Court this month seeking to block Chesapeake-based Dollar Tree’s recent $8.5 billion acquisition of Family Dollar, even as Dollar General is looking into challenging the deal with a bid of its own.