The announcement by K-Sea Transportation Partners L.P. that its board of directors agreed to a takeover by Kirby Corporation prompted an investigation on behalf of investors of K-Sea Transportation Partners L.P. (Public, NYSE:KSP) concerning the potential unfairness of the takeover and possible breaches of fiduciary duty.

The investigation by a law firm concerns whether certain directors and officers at K-Sea Transportation Partners L.P. (Public, NYSE:KSP) or others breached or will breach their fiduciary duties in connection with proposed buyout.

On March 13, 2011, K-Sea Transportation Partners L.P. announced that they have entered into a merger agreement with Kirby Corporation (NYSE: KEX) under which K-Sea Transportation Partners will become a wholly-owned subsidiary of Kirby Corp. Under the terms of the agreement, K-Sea Transportation Partners common unitholders will have the right to elect to receive either (a) $8.15 in cash; or (b) $4.075 in cash plus 0.0734 of a share of Kirby Corp.'s common stock for each common unit. K-Sea Transportation Partners' preferred unitholders will receive $4.075 in cash and 0.0734 of a share of Kirby Corp.'s common stock for each preferred unit. K-Sea's general partner will receive $8.15 in cash for each general partner unit and $18 million in cash for K-Sea's incentive distribution rights.
K-Sea Transportation Partners L.P. said the transaction price of $8.15 per K-Sea Transportation Partners L.P. common unit represents a 26% premium to the closing price on Friday, March 11th and a 38% premium to the 30-day average closing price.
However in response to the takeover proposal shares of K-Sea Transportation Partners L.P. (NYSE: KSP) increased from $6.49 on Friday to $8.29 on Monday, thus succeeding the offered price of $8.15 per share.
Furthermore K-Sea Transportation Partners L.P. units traded in April 2010 as high as $9.93 and in January 2010 as high as $13.89. Given a stock price in last April and January KSP stockholders would hand their KSP shares over at a discount. KSP shares traded in 2009 as high as $23.54, during 2008 as high as $37.26, and in 2007 as high as $47.49 per share.
Additionally K-Sea Transportation Partners L.P.s 12months Total Revenue went from $226.57million reported on June 30, 2007 to $265.43million reported on June 30, 2010.

Further in connection with this transaction, KA First Reserve, LLC and certain affiliates of Jeffries Capital Partners have entered into support agreements pursuant to which they have agreed to vote their K-Sea Transportation Partners L.P. units in favor of the merger. These entities currently hold all of K-Sea's outstanding preferred units and approximately 59.9% of its outstanding common units (including the outstanding preferred units on an as-converted basis), which is a sufficient number of units to approve the merger.

Therefore the investigation monitors and concerns whether K-Sea Transportation Partners L.P. Board of Directors undertook an adequate and fair sales process to obtain the maximized consideration for all unitholders of K-Sea Transportation Partners L.P. (NYSE:KSP) and breached or will breach their fiduciary duties to K-Sea Transportation Partners (KSP) investors by failing to adequately shop the Company before entering into the transaction. The investigation concerns also whether Kirby Corporation would underpay for NYSE:KSP units, thus unlawfully harming KSP investors. A potential class action lawsuit would seek to maximize the amount of money and information for NYSE:KSP unitholders would receive in a buyout, so the law firm.