According to the complaint the plaintiff alleges that the board of directors has breached its fiduciary duties to its shareholders in connection the proposed takeover. Indeed, shares of International Coal Group, Inc. jumped in response to the takeover news from slightly over $11 on Friday to $14.43 on Monday.
However, the plaintiff alleges that the offer is inadequate and materially undervalues the company and is unfair to its shareholders. In fact, International Coal Group, Inc. has performed well for its investors in the past. International Coal Group'12months Total Revenue increased over the past four annual filing periods from $849.15 million in 2007 to $1,166.47 million in 2010. International Coal Group was able to increase its Net Income from a Net Loss of $147.56 million in 2007 to a Net Income of $30.11 million in 2010.
Furthermore the plaintiff alleges that the sale process is unfair to ICO stockholders as directors have agreed to preclusive corporate and deal protections such as a "no solicitation"and a $115 million "termination fee"clause and therefore "have structured the deal to provide the appearance of fairness while in reality tilting the sales process in favor of Arch".
