Ademi LLP is investigating Hersha (NYSE: HT) for possible breaches of fiduciary duty and other violations of law in its transaction with KSL.
In the transaction, Hersha stockholders are expected to receive only $10.00 in cash for each common share they own, and holders of Hersha’s 6.875% Series C Cumulative Redeemable Preferred Shares, 6.50% Series D Cumulative Redeemable Preferred Shares and 6.50% Series E Cumulative Redeemable Preferred Shares will receive $25.00 in cash, plus any accrued and unpaid dividends to which they are entitled, for each preferred share they own. The transaction agreement unreasonably limits competing transactions for Hersha by imposing a significant penalty if Hersha accepts a competing bid. Hersha insiders will receive substantial benefits as part of change of control arrangements.
We are investigating the conduct of Hersha’s board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.