An investor in Danvers Bancorp, Inc. (DNBK) shares filed a lawsuit against the proposed takeover of Danvers Bancorp by People's United Financial, Inc.. The plaintiff alleges the defendants breached their fiduciary duties.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duty arising out of their attempt to sell Danvers Bancorp to People's United Financial, Inc via an unfair process at an unfair price.

After the market closed on Thursday, Jan. 20, 2011, Danvers Bancorp, Inc. (Nasdaq: DNBK) and People's United Financial, Inc. (Nasdaq: PBCT) announced an agreement pursuant to which People's United Financial will acquire Danvers Bancorp, in a 55% stock and 45% cash transaction valued at approximately $493 million. Under the terms of the agreement Danvers Bancorp shareholders may elect to receive either $23.00 in cash, or 1.624 shares of People's United Financial stock for each Danvers Bancorp share, subject to customary pro ration provisions, whereby 55% of Danvers Bancorp shares will be exchanged for stock and 45% for cash.

Shares of Danvers Bancorp, Inc. (NASDAQ:DNBK), which closed on Thursday before the announcement at $17.02, jumped in after hours trading to $22 per share or almost 30%.

But the plaintiff says in the class action complaint that the deal deters other suitors and lavishes unfair windfalls on executives.