Two Law Firms Move To 'Investigate' Citadel's Deal With Cumulus
March 10, 2011 at 8:50 AM (PT)
Shortly after CUMULUS released the official word of its deal with CITADEL BROADCASTING, come news that not one, but two law firms are investigating CITADEL's moves in the merger.
BERNSTEIN LIEBHARD LLP is investigating whether the Board of Directors of CITADEL BROADCASTING CORP. "breached its fiduciary duty to its shareholders in agreeing to sell CITADEL to CUMULUS MEDIA INC."
Wrote BERNSTEIN LIEBHARD, "Under the terms of the agreement, CITADEL shareholders will receive $37 for each share they own payable in cash and shares of CUMULUS stock. The investigation is focused on the potential unfairness of the price to CITADEL shareholders and the process by which the CITADEL Board of Directors considered and approved the transaction."
A second law firm has also responded, as ROBBINS UMEDA LLP, a shareholder rights litigation firm, is "investigating possible breaches of fiduciary duty and other violations of state law by members of the board of directors of CITADEL BROADCASTING CORPORATION in connection with their efforts to sell CITADEL BROADCASTING to CUMULUS MEDIA, INC."
ROBBINS UMEDA wrote, "The investigation seeks to determine whether CITADEL BROADCASTING's board of directors undertook a fair process to obtain maximum value for its shareholders. Specifically, the investigation concerns whether the board is taking advantage of CITADEL BROADCASTING's recent emergence from bankruptcy and positive third quarter earnings for 2010 by striking a deal while the stock price is still depressed."