Ademi LLP is investigating Southwestern (NYSE: SWN) for possible breaches of fiduciary duty and other violations of law in its transaction with Chesapeake.
In the transaction, Southwestern stockholders will receive only 0.0867 shares of Chesapeake common stock for each share of Southwestern common stock owned at closing. At closing, Chesapeake shareholders will own approximately 60% and Southwestern shareholders will own approximately 40% of the combined company, on a fully diluted basis. The transaction agreement unreasonably limits competing transactions for Southwestern by imposing a significant penalty if Southwestern accepts a competing bid. Southwestern insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Southwestern’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.