BOSTON, May 6, 2014 /PRNewswire/ -- Block & Leviton LLP (www.blockesq.com), a Boston-based law firm representing investors nationwide, has commenced an investigation into possible breaches of fiduciary duty by the board of directors of Forest Oil Corporation ("Forest" or the "Company") (NYSE: FST) concerning the proposed acquisition of the Company by Sabine Oil & Gas LLC ("Sabine"), currently a limited liability company that is not publicly traded.
Under the terms of the proposed transaction, each share of Forest will be converted into a 0.1 share of Sabine common stock, in an attempt to replicate a 10:1 reverse stock split, and Sabine's parent entity will contribute its equity interest in Sabine in exchange for 33 million shares of a newly formed holding company. Forest shareholders are expected to own approximately 26.5 percent of the combined company and Sabine unit holders will hold 73.5 percent. At least two directors are believed to have negotiated positions for themselves on the combined company's board.
Upon executing the merger, the combined company is expected to trade on the NYSE. However, no timing or sureties surrounding this potential listing have yet been released, which could leave Forest investors holding a minority interest in a highly illiquid asset. Additionally, it is extremely difficult for shareholders to determine the adequacy of the consideration they are to receive, given that it will be entirely paid in shares of a yet to be created company, funded predominantly through the assets of a non-publicly traded company.
Block & Leviton's investigation seeks to determine, among other things, whether Forest's directors breached their fiduciary duties by failing to maximize shareholder value in the potential acquisition and the fairness by which the directors considered and approved the transaction.
If you are a Forest shareholder and have questions about your legal rights, or if you have information relevant to this investigation, please contact attorney Steven Harte, at (617) 398-5600 or email him at Steven@blockesq.com. Whistleblowers confidentiality is assured.
Block & Leviton is a Boston-based law firm representing investors nationwide for violations of securities laws. The firm's lawyers have collectively been prosecuting securities cases on behalf of investors for over 70 years. This notice may constitute attorney advertising.
BLOCK & LEVITON LLP
Steven P. Harte, Esq.
SOURCE Block & Leviton LLP