Silverleaf Resorts, Inc. Directors Face Investor Investigation Concerning Breaches Of Fiduciary Duty

If you purchased shares of Silverleaf Resorts, Inc. (NASDAQ:SVLF) prior to the announcement and continue to hold those SVLF shares, you have certain options and you should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Silverleaf Resorts
Affected Securities: 

The proposed buyout of Silverleaf Resorts, Inc. has triggered investigations for investors in Silverleaf Resorts, Inc. (NASDAQ:SVLF) shares questioning the potential unfairness of the deal and possible breaches of fiduciary duties.

The investigation by a law firm concerns possible breaches of fiduciary duties by certain officers and directors at Silverleaf Resorts, Inc. arising out of their attempt to sell Silverleaf Resorts to an Affiliate of Cerberus Capital Management L.P.

On Thursday, Feb 3, 2011, Silverleaf Resorts, Inc. (NASDAQ: SVLF) announced that it has entered into an agreement to be acquired by SL Resort Holdings Inc., an affiliate of Cerberus Capital Management, L.P. Under the terms of the proposed agreement, Silverleaf Resorts, Inc shareholders will receive, at the closing, $2.50 in cash for each share of Silverleaf Resorts, Inc common stock (SVLF) they own. Silverleaf Resorts said the offer represents a premium of approximately 75% based on the closing trading price of $1.43 of Silverleaf common stock on February 3, 2011.
In fact in response to the takeover news shares of Silverleaf Resorts, Inc. (Public, NASDAQ:SVLF) rose from $1.50 days before the announcement to $2.45 per share.

But at least one analyst has set a target price of $5.00 for Silverleaf Resorts, Inc. (NASDAQ: SVLF) shares and the book value of Silverleaf Resorts shares is $5.47 per share. In addition the performance of Silverleaf Resorts, Inc over the past years was consistent. Silverleaf Resorts reported between 2006 and 2009 steady 12months Total Revenue ranging from $206.88million to $263.96million. Additionally The Chairman of the Board of Directors and CEO of Silverleaf Resorts Robert E. Mead has already entered into a Voting Agreement with Cerberus Capital Management, L.P. pursuant to which he has agreed to vote shares beneficially owned by him representing 24.5% of the outstanding shares of Silverleaf Resorts, Inc in favor of the proposed transaction.

Therefore the investigation concerns whether Silverleaf Resorts Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of Silverleaf Resorts, Inc. (NASDAQ:SVLF) and specifically breached their fiduciary duties to Silverleaf Resorts (SVLF) shareholder by failing to adequately shop the Company before entering into this transaction. A potential class action lawsuit would seek to maximize the amount of money and information SVLF shareholders would receive in a buyout, so the law firm.