Shareholders recently asked a law firm to investigate an apartment community manager for potential breaches of fiduciary duty. This may become a class action lawsuit, depending on its outcome.
Law firm Brodsky and Smith is looking into allegations against the board of directors at BRE Properties, Inc., as it agreed to have the company purchased by Essex Property Trust. The terms of the pending deal would give shareholders of BRE Properties approximately 0.29 shares of Essex stock, as well as $12.33 in cash for each share they currently hold.
The low valuation may mean there was a breach of fiduciary duty, as well as other potential state law issues. This is because the board may not have looked out for the best interests of shareholders during this sale, as the process may not have been comprehensive enough.
Some of the reasons for this complaint was that BRE Properties had a stock value that traded at $59.34 per share on Dec. 6, 2013. An independent analysts noted that the price target for BRE Properties would be approximately $59 per share.
Shareholders can speak to the law firm at no cost in order to learn more about the investigation. This can include discussing the pending transaction, as well as any other rights issues. Evan Smith and Jason Brodsky are available from the office to field questions. They can be reached by email, telephone or mail.
Second investigation underway
Another law office is looking into claims from shareholders to determine if there was issues with the pending transaction. This also may become a class action claim in the future.
Pomerantz Grossman Hufford Dahlstrom and Gross, LLP, noted it is examining shareholder claims against BRE Properties. The offered amount to stockholders is the same as mentioned above.
The valuation in the pending transaction may be too low for some shareholders, as other estimates have the company worth more. The book value and price to earnings before interest and tax is lower than other transactions that are similar, as the company's stock was higher than the agreed amount as recent as two weeks before the investigation began.
For those who have any questions or issues with this process, it is possible to speak with the law firm to learn more. This can be most easily done by contacting firm member Ofer Ganot, who can be reached by phone or email.