An angry investor filed a lawsuit in Delaware State Court on behalf of current investors of DynCorp International Inc. (NYSE:DCP), who purchased the DCP shares before April 12, 2010, alleging breaches of fiduciary duty by members of the DynCorp. board of directors for selling itself too cheaply to Cerberus Capital Management.
DynCorp International Inc, located in Falls Church, VA, is a provider of specialized, mission-critical professional and support services outsourced by the United States military, non-military United States governmental agencies and foreign governments. According to the complaint the plaintiff alleges breaches of fiduciary duty by the Board of Directors of DynCorp International arising out of their attempt to sell DynCorp International Inc. (NYSE:DCP) to affiliated funds and/or managed accounts of private investment firm Cerberus Capital Management, L.P. for $1.5 billion.

On April 12, 2010, DynCorp International, Inc. (NYSE: DCP) announced that it has entered into a definitive agreement to be acquired by affiliated funds and/or managed accounts of private investment firm Cerberus Capital Management, L.P.in a transaction with a total value of approximately $1.5 billion. Under the agreement, DynCorp International’s stockholders will receive $17.55 in cash for each share of DynCorp International common stock they own. According to DynCorp. the agreement was approved by DynCorp International’s Board of Directors and the offer represents a premium of approximately 49% percent, based on the closing trading price of $11.75 on April 9, 2010, and approximately 50% over the 90-day average closing trading price.

Shares of DynCorp International Inc. (DCP) traded after the announcement at $17.49 per share, and at about $12 before the news. DCP shares were down from its 52weekHigh of $22.03 per share and over $26 per share in 2008.

The plaintiff alleges, among other things, that the offer is unfair and grossly inadequate to DynCorp shareholder because the offer represents a “significant discount to the Company’s $21.49 per share high during the past year” and while the merger agreement provides for a brief “go shop” period there is a $30 million termination fee plus an additional $300 million due under certain circumstances.