China Security & Surveillance Technology
Robbins Umeda LLP Is Investigating China Security & Surveillance Technology, Inc. Acquisition for Shareholders
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by members of the board of directors of China Security & Surveillance Technology (NYSE: CSR) in connection with their efforts to be acquired by Rightmark Holdings Limited, which is wholly owned indirectly by Guoshen Tu, and Rightmark Merger Sub Limited, which is wholly owned by Rightmark Holdings Limited.
On April 21, 2011, China Security announced it has entered into a definitive agreement and plan of merger with Rightmark. Under the terms of the current agreement, each outstanding share of China Security will be converted into the right to receive $6.50 in cash, except for the shares held by the company’s Chief Executive Officer, Tu, and certain other senior members of the management. The transaction is expected to close in the third quarter 2011.
The investigation focuses on whether China Security’s board is undertaking a fair process to obtain maximum value for its shareholders. Of particular interest, Guoshen Tu is China Security’s Chief Executive Officer and the Chairman of the board of directors and beneficially owns approximately 20.9% of China Security’s outstanding shares of common stock. His stock, and the stock held by certain other members of management, will not be exchanged for cash. Instead, these insiders will receive equity in the post-acquisition company. Further, the definitive agreement contains a termination fee and a “no solicitation clause.” These sections of the agreement can serve to deter competitors from making higher offers for China Security.
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