Ademi LLP is investigating First Reliance (OTCQX: FSRL) for possible breaches of fiduciary duty and other violations of law in its recently announced transaction with Colony Bankcorp.
First Reliance shareholders will receive either $19.75 in cash or 0.94 of a Colony common share per First Reliance share, subject to proration. Approximately 20% of First Reliance shares will be converted to cash and the remaining 80% to Colony Bankcorp stock.
First Reliance insiders will receive substantial benefits as part of change of control arrangements.
The transaction agreement unreasonably limits competing transactions for First Reliance by imposing a significant penalty if First Reliance accepts a competing bid. We are investigating the conduct of the First Reliance board of directors, and whether they are fulfilling their fiduciary duties to all shareholders.
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