SOURCE: Brower Piven, A Professional Corporation

February 10, 2011 14:34 ET

Brower Piven Announces Class Action Lawsuit in Connection With the Acquisition of Smurfit-Stone Container Corporation by RockTenn

STEVENSON, MD--(Marketwire - February 10, 2011) - The law firm of Brower Piven, A Professional Corporation, announces that a class action lawsuit has been commenced in the Court of Chancery of the State of Delaware on behalf of all shareholders of Smurfit-Stone Container Corporation ("Smurfit-Stone") (NYSE: SSCC).

The complaint alleges violations of state law by the Board of Directors of Smurfit-Stone relating to the proposed acquisition of the company by RockTenn ("RockTenn"). The complaint alleges that Smurfit-Stone's Board of Directors breached their fiduciary duties by failing to maximize shareholder value, among other things.

On January 23, 2011, the complaint states, Smurfit-Stone and RockTenn announced that they entered into a definitive agreement for Smurfit-Stone to be acquired by RockTenn in a transaction valued at approximately $3.5 billion. The complaint alleges that under the terms of the agreement, Smurfit-Stone shareholders will receive $35 per share -- consisting of 50% cash and 50% RockTenn stock (RockTenn will pay 0.30605 shares of its own stock, plus $17.50 in cash, for each share of Smurfit-Stone). Although RockTenn's acquisition price represents approximately a 27% premium over Smurfit-Stone's closing share price on January 21, 2011, the complaint alleges that the consideration is, in fact, comparatively low. The complaint alleges that analysts have asserted that Smurfit-Stone "sold-out too early," and that they are "definitely leaving money on the table here." The complaint further alleges that the defendants failed to negotiate any protection against the decline in the RockTenn stock component of consideration offered to shareholders in the proposed transaction, or even the right to terminate the proposed transaction in the event RockTenn stock trades below a certain level. In addition to the inadequacy of the consideration offered to Smurfit-Stone shareholders, the complaint alleges that the process that led to the proposed transaction suffers from disabling conflicts of interest. The complaint alleges that the sale of Smurfit-Stone just seven months after emerging from bankruptcy is conveniently timed to create a windfall for certain individual defendants and other company insiders. For example, including stock and options that will vest automatically with the sale of the company, the complaint alleges defendant/Smurfit-Stone CEO Patrick Moore will walk away with total gains of $59.5 million with the consummation of the proposed transaction.

If you are a current owner of shares of Smurfit-Stone, you may obtain additional information about this lawsuit by contacting Brower Piven at www.browerpiven.com, by email at hoffman@browerpiven.com, by calling 410-415-6616, or at Brower Piven, A Professional Corporation, 1925 Old Valley Road, Stevenson, Maryland 21153. Attorneys at Brower Piven have combined experience litigating securities and class action cases of over 60 years. If you choose to retain counsel, you may retain Brower Piven without financial obligation or cost to you, or you may retain other counsel of your choice. You need take no action at this time to be a member of the class.

Contact Information

  • CONTACT:
    Charles Piven
    Brower Piven, A Professional Corporation
    Stevenson, Maryland
    410-415-6616
    Email Contact