An investor of L-1 Identity Solutions, Inc. (NYSE:ID) filed a lawsuit in State Court alleging breaches of fiduciary duty by the ID board of directors arising out of their attempt to sell L-1 Identity Solutions, Inc. too cheaply to Safran.
According to the complaint the plaintiff alleges that the defendants breached their fiduciary duties owed to ID investors for trying to sell L-1 Identity Solutions through an unfair process at an unfair price to Safran and Laser Acquisition Sub

On Monday, Sep 20, 2010 L-1 Identity Solutions announced that it has entered into an agreement to be acquired by Safran in a merger transaction providing for stockholders to receive $12.00 per share in cash, for an aggregate enterprise value of approximately $1.6 billion, inclusive of outstanding debt. Under the terms of the agreement, Safran has agreed to acquire L-1 Identity Solutions, Inc. following the sale of L-1's intelligence services businesses to BAE Systems, Inc. BAE Systems, Inc. (the U.S. affiliate of BAE Systems plc) has agreed to acquire the stock and membership interests of the entities comprising the L-1 intelligence services businesses for a purchase price of approximately $295.8 million in cash and approximately $7.2 million of certain assumed obligations for a total value of $303.0 million. According to L-1 Identity Solutions, Inc. its board of directors has unanimously approved both the Safran agreement and BAE Systems sale transaction and the offer by Safran for L-1 Identity Solutions stockholders to receive $12.00 per share in cash represents a premium of 24 percent over L-1's closing stock price on the NYSE on September 17, 2010 and a premium of 66 percent over the closing stock price on January 5, 2010, the day prior to L-1's announcement of its strategic alternatives review process.

But even though shares of L-1 Identity Solutions, Inc. (NYSE:ID) traded before the announcement at $9.78 per share and increased to $11.62 per share after the news, L-1 shares traded as high as $17 during 2008 and over $21 per share in 2007. The plaintiff claims that while defendants state the consideration represents a 24% premium over L-1’s closing stock price the last trading day before the merger was announced, the consideration in fact is an approximately 25% discount to L-1’s 2 year High. In addition, among other things, the plaintiff alleges that the merger agreement is unfair because is contains a strict non shop provision and a heavy $37.5million (including expenses) termination fee.