Newman Ferrara LLP is investigating potential claims against the board of directors of FirstCity Financial Corporation (“FirstCity”) (Nasdaq: FCFC) concerning the proposed acquisition of FirstCity by investment firm Varde Partners Inc.
On December 21, 2012, FirstCity announced that it had entered into an agreement and plan of merger to be acquired by certain funds managed by Varde in a deal valued at approximately $244.9 million. Under the terms of the agreement, FirstCity’s shareholders will receive $10.00 in cash per share of FirstCity stock owned. However, the $10.00 per share offer price values FirstCity at only 78% of FirstCity’s June 2012 reported book value of $12.88 per share. In addition, FirstCity stock traded at above the $10.00 per share offer price as recently as May 10, 2012 when the stock reached $10.83 per share.
FirstCity’s Board of Directors has unanimously approved the proposed deal. Upon closing of the proposed deal, James Sartain, President and Chief Executive Officer of FirstCity will be retained by Varde to serve as a consultant.
Newman Ferrara LLP’s investigation concerns whether FirstCity’s Board of Directors has breached its fiduciary duties to act in the best interests of FirstCity’s shareholders and to take all necessary steps to ensure that FirstCity’s shareholders receive the maximum value readily available for their shares of FirstCity common stock.
Concerned investors are encouraged to contact Newman Ferrara attorney Roy Shimon at (212) 619-5400 or
to discuss this investigation, their rights, or potential remedies.
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