Ademi LLP is investigating Cara (NASDAQ: CARA) for possible breaches of fiduciary duty and other violations of law in its transaction with Tvardi.
In the transaction, pre-Merger Cara stockholders are expected to own approximately 17.0% of the combined company and pre-Merger Tvardi investors are expected to own approximately 83.0% of the combined company, in each case, prior to adjustments. Cara insiders will receive substantial benefits as part of change of control arrangements.
The transaction agreement unreasonably limits competing transactions for Cara by imposing a significant penalty if Cara accepts a competing bid. We are investigating the conduct of Cara’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.