RC2 Corporation Under Investor Investigation Over Possible Breaches Of Fiduciary Duties

If you purchased RC2 Corporation (NASDAQ:RCRC) and currently continue to hold those NASDAQ:RCRC shares, and/or if you have any information relating the investigation, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
RC2
Affected Securities: 
NASDAQ: RCRC

After RC2 Corporation announced that its board of directors agreed to a takeover by the Tomy Company Ltd an investigation on behalf of investors of RC2 Corporation (NASDAQ:RCRC) concerning the potential unfairness of the takeover and possible breaches of fiduciary duty was announced.

The investigation by a law firm concerns whether certain directors and officers at RC2 Corporation (NASDAQ:RCRC) or others breached their fiduciary duties in connection with proposed buyout by Tomy Company Ltd.

Shares of RC2 Corporation traded on Wednesday March 9 at roughly $22, increased on Thursday to over $26 and traded on Friday at over $28.50 per share.

On Wednesday March 9 a media report already said that TOMY Company, Ltd. is acquiring RC2 Corporation (Nasdaq: RCRC). Then on March 11, before the market opened RC2 Corporation (NASDAQ: RCRC) and Tomy Company Ltd. announced that they have entered into an agreement pursuant to which Tomy Company Ltd. will acquire RC2 Corp. through an all-cash tender offer and second-step merger valued at approximately US$640 million.
Under the terms of the proposed agreement Tomy Company Ltd, through a U.S. subsidiary, will make an offer to purchase all outstanding shares of RC2 common stock for US$27.90 per share.

RC2 Corporation said the offer represents a 30.9% premium to RC2 Corp.’s average closing stock price over the three-month period ended March 9, 2011, and a 27.2% premium over the closing price of RC2 Corporation’s common stock on March 9, 2011.

However RC2 Corporation performed well for its shareholders in the past. RC2 Corp’s 12months Total Revenue ranged in the past four years between $427.24million to $489million. Its Net Income increased from 2009 to 2010 from $26.96million to $29.69million respectively. In addition analysts have set a price target as high as $29.00 per share for RC2 stock.

Therefore the investigation monitors and concerns whether RC2 Corp. Board of Directors undertook an adequate and fair sales process in the event of the takeover to obtain the maximized consideration for all shareholders of RC2 Corporation (NASDAQ:RCRC) and breached their fiduciary duties to RC2 Corp (RCRC) shareholder by failing to adequately shop the Company before entering into any transaction. The investigation concerns also whether Tomy Company Ltd would underpay for NASDAQ:RCRC shares, thus unlawfully harming RCRC investors. A potential class action lawsuit would seek to maximize the amount of money and information for NASDAQ: RCRC shareholders would receive in a buyout, so the law firm.