After rumors about a potential takeover of LeapFrog Enterprises, Inc. emerged an investigation on behalf of investors of LeapFrog Enterprises, Inc. (NYSE:LF) over possible breaches of fiduciary duty was announced.

The investigation by a law firm concerns whether certain directors and officers at LeapFrog Enterprises, Inc. (NYSE: LF) or others including any insiders breached or will breach their fiduciary duties in connection with a potential takeover and also in the event of a buyout.

Shares of LeapFrog Enterprises, Inc. increased on Thursday, Feb 10, 2011 to $4.75 per share.

But LF shares traded as early as December 2010 at $6.44 per share and during April 2010 at $7.45 per share. Media reports said LeapFrog could be a potential $650million takeover target for competitors like Mattel Inc or Habro Inc. The reports said a potential deal could value LeapFrog shares in a range from $7.50 up to $10 per share valuing LeapFrog at roughly $646 million. But despite LeapFrog Enterprises Inc's disappointing outlook last month LeapFrog Enterprises performance increased over the past years. Even though LeapFrog Enterprises, Inc. reported decreasing 12 months Total Revenue from $502.25million in 2006 to $379.83million in 2009, LeapFrog Enterprises was able to reduce its Net Loss from 2006 $145.09million in 2006 to $2.69million in 2009. During 2008 and 2007 LF shares traded even above $10 per share.

Therefore the investigation monitors and concerns whether the LeapFrog Enterprises Board of Directors will undertake an adequate and fair sales process in the event of a takeover to obtain the maximum consideration for all shareholders of LeapFrog Enterprises, Inc. (NYSE:LF) and will breach their fiduciary duties to LeapFrog Enterprises (LF) shareholder by failing to adequately shop the Company before entering into any transaction. A potential class action lawsuit would seek to maximize the amount of money and information NYSE: LF shareholders would receive in a buyout, so the law firm.