Suit Tries to Sink $275M SouthWest Water Merger

Law360, New York (March 22, 2010, 3:31 PM EDT) -- Awash in shareholder litigation, SouthWest Water Co. is facing a putative class action alleging the company’s brass arranged an undervalued $275 million merger in order to dodge a pending derivative action over accounting irregularities that caused SouthWest’s stock price to plummet in 2008.

SouthWest shareholder Frank Leskovitz lodged the complaint last week in the Delaware Chancery Court, claiming the deal is rigged to benefit the company’s directors and officers, discourages competing bids and ignores rebounding stock values as well as SouthWest's strong prospects.

The company has...
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