Advocat Sued By Shareholders For Spurning $51M Takeover

Law360, New York (May 18, 2012, 2:17 PM EDT) -- Shareholders of Advocat Inc. launched a class action against the nursing home chain’s board of directors in Tennessee federal court on Tuesday, alleging they breached their fiduciary duties in spurning a $51 million takeover bid by investment firm Covington Investments LLC.

In spite of Advocat losing $1.5 million in the first quarter of 2012 and having negative per-share earnings for the twelve-month period ending March 31, its board refused to even consider the $8.50 per-share offer from Covington made public May 11, which was a 96...
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