A lawsuit has been filed and is seeking class action status trying to block the proposed merger of Westborough Financial Services Inc. and Assabet Valley Bancorp, alleging the transaction is unfair in both price and procedure. The lawsuit was filed in Worcester Superior Court and alleges Westborough Financial and its 14 directors breached their fiduciary duties by structuring a deal that includes $2.4 million in payments to directors and executive officers.
In November 2006, Westborough Financial Services announced a merger with Assabet Valley, the parent of Hudson Savings Bank, in a $20.6 million cash transaction. The merger would create a nearly $1 billion community bank and produce no layoffs or branch closings. The lawsuit claims the merger is discriminatory because it cashes out minority shareholders while enabling majority shareholders to maintain an equity interest in the merged institution.
