An investor RC2 Corporation (NASDAQ:RCRC) shares filed a lawsuit against members of the board of directors of RC2 Corp to block the sale of RC2 Corp. under the current conditions.
According to the complaint the plaintiff alleges the defendants breached their fiduciary duties arising out of their attempt to sell RC2 Corp too cheaply and via an unfair process to Tomy Company Ltd.

Shares of RC2 Corporation traded on Wednesday March 9 at roughly $22, increased on Thursday to over $26 and then traded on Friday at over $28.50 per share.

On Wednesday March 9 a media report already said that TOMY Company, Ltd. is acquiring RC2 Corporation (Nasdaq: RCRC). Then on March 11, before the market opened RC2 Corporation (NASDAQ: RCRC) and Tomy Company Ltd. announced that they have entered into an agreement pursuant to which Tomy Company Ltd. will acquire RC2 Corp. through an all-cash tender offer and second-step merger valued at approximately US$640 million.Under the terms of the proposed agreement Tomy Company Ltd, through a U.S. subsidiary, will make an offer to purchase all outstanding shares of RC2 common stock for US$27.90 per share.
RC2 Corporation said the offer represents a 30.9% premium to RC2 Corp.’s average closing stock price over the three-month period ended March 9, 2011, and a 27.2% premium over the closing price of RC2 Corporation’s common stock on March 9, 2011.

However the plaintiff alleges the price is too low and the offer undervalues RC2 Corp and is an attempt by Tomy Company, Ltd. to buy the company “at a bargain price during a temporary downturn in the economy”.
In fact the performance of RC2 Corporation for its shareholders in the past was relatively consistent. RC2 Corp’s 12months Total Revenue ranged in the past four years between $427.24million to $489million. Its Net Income increased from 2009 to 2010 from $26.96million to $29.69million respectively. In addition analysts have set a price target as high as $29.00 per share for RC2 stock.