An investor filed a lawsuit in Delaware State Court on behalf of current investors of Protection One, Inc. (NASDAQ:PONE), who purchased the PONE shares before April 26, 2010, against Protection One, member of its board of directors and certain majority stockholders alleging breach of fiduciary duty.
According to the complaint the plaintiff alleges breaches of fiduciary duty the Board of Directors of Protection One arising out of their attempt to Protection One, Inc. (NASDAQ:PONE) to affiliates of GTCR. Protection One, Inc., located in Lawrence, KS is a provider of electronic security alarm monitoring services, providing installation, maintenance and electronic monitoring of alarm systems to single-family residential, commercial, multifamily and wholesale customers. On Monday, April 26, 2010, Protection One, Inc. (Nasdaq:PONE) announced that it has entered into a definitive agreement to be acquired by affiliates of GTCR at a transaction value of approximately$828 million, including the refinancing of Protection One's debt. Under the terms of the agreement, an affiliate of GTCR will commence on or about May 3, 2010 a tender offer to acquire all of the outstanding common stock of Protection One for $15.50 per share in cash.

According to Protection One, Inc. its board of directors unanimously approved the transaction and the offer price represents a premium of 13% over the April 23, 2010 closing stock price of $13.76, and a premium of 118% over the $7.10 closing stock price on January 19, 2010, which was the last business day prior to Protection One's public announcement that it was considering a possible sale of the company.

Shares of Protection One, Inc. (PONE) traded after the takeover announcement at $15.43 per share, and at $13.94 per share the trading day before the news. PONE shares reached over $20 per share in 2007, and $24 per share in 2006.

According to the complaint Protection One is controlled by its majority stockholders, which are investment vehicle controlled by defendant Quadrangle Group, LLC and former Quadrangle investment vehicles now controlled by defendant Monarch Alternative Capital LP, which collectively own approx. 70% of Protection One’s outstanding common stock and designate a majority of its board and elect all its directors. The plaintiff alleges that GTCR Group intends to take Protection One private and cash out its minority stockholders for inadequate consideration of $15.50 per share and that the majority stockholders Quadrangle Group, LLC and Monarch Alternative Capital LP have breached their fiduciary duty because they have irrevocable agreed to tender to GTCR Group since the 60% minimum tender condition for GTCR Group’s $15.50 Tender Offer for all outstanding shares of PONE stock will be satisfied even if not a single share of PONE stock owned by stockholders other than Quadrangle Group, LLC and Monarch Alternative Capital LP is tendered in the tender offer.