Robbins Umeda LLP Announces an Investigation of Advocat Inc.
Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by members of the board of directors of Advocat Inc. (NASDAQ: AVCA) relating to the proposed acquisition by Covington Investments, LLC. Concerned shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Gregory E. Del Gaizo at (800) 350-6003.
Robbins Umeda LLP is investigating whether Advocat’s board is acting in the best interest of shareholders. On May 11, 2012, Covington announced that it submitted a merger proposal to the board of Advocat on May 11, 2012. Under the terms of the proposal, Advocat shareholders would receive $8.50 in cash for each share of the company they own. The proposal represents a 96% premium for Advocat shareholders.
Further, on May 11, 2012, Covington revealed that it had previously made three compelling proposals to acquire Advocat beginning on February 27, 2012, and that Advocat’s board has shown no interest in negotiating a transaction. Given the board of Advocat’s refusals to explore an acquisition proposal, the firm is investigating whether officers and directors at the company are working to maximize value for Advocat shareholders or to preserve their own leadership positions at the company.
Robbins Umeda LLP notes that a potentially appropriate course of conduct for Advocat shareholders is to file a class action against the company’s board to attempt to ensure that it negotiates with Covington and other potential suitors in good faith and in a manner that maximizes shareholder value.
Robbins Umeda LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.