MILWAUKEE, Dec. 18, 2013 (GLOBE NEWSWIRE) -- We are investigating the Board of Directors of Nicholas Financial, Inc. for possible breaches of fiduciary duty and other violations of state law in connection with the sale of Nicholas to Prospect Capital.
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Nicholas's long-term financial outlook is very positive and yet Nicholas shareholders will receive only $16 per share, dramatically less than Nicholas's stock price in recent trading. Prospect Capital is well aware of Nicholas's improving financial metrics and is purchasing Nicholas at a substantial discount. The merger agreement unreasonably limits prospective bids for Nicholas by (i) prohibiting solicitation of any further bids, and (ii) imposing a termination penalty should Nicholas receive and accept a superior bid. Nicholas insiders, their affiliates and other majority shareholders own significant voting units of Nicholas, and will receive benefits as part of change of control arrangements, and therefore can unduly influence a sale of Nicholas not necessarily in the best interests of non-insider shareholders. In light of these facts, our investigation centers on the conduct of Nicholas's Board of Directors, who have unanimously approved the transaction, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for Nicholas given its current financial condition and prospects.
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Ademi & O'Reilly, LLP Guri Ademi 3620 East Layton Ave. Cudahy, WI 53110 Toll Free: (866) 264-3995 Fax: (414) 482-8001 www.ademilaw.com