After the Somanetics Corp board of directors announced the proposal by Covidien plc to take over Somanetics Corporation an investigation on behalf of current investors Somanetics Corporation (NASDAQ:SMTS) over possible breaches of fiduciary duty by the board of directors of Somanetics was announced.

The investigation by a law firm focuses on potential breaches of fiduciary duty and other violations of state law by the Board of Directors of Somanetics Corp. arising out of their attempt to sell Somanetics Corporation (NASDAQ:SMTS) to Covidien plc.

Somanetics Corporation, located in Troy, MI, develops, manufactures and markets the INVOS System, a non-invasive patient monitoring system that provides accurate, real-time blood oxygen measurements in the brain and elsewhere in the body in tissues beneath the sensor in patients greater than 2.5 kilograms and continuously measures changes in blood oxygen levels for individuals of any weight. Somanetics Corporation reported in 2007 Total Revenue of $38.59million, in 2008 $47.46million, and in 2009 $50.01million.

On Wednesday, June 16, 2010, and Somanetics Corporation (NASDAQ: SMTS) and Covidien plc (NYSE: COV) announced that they have signed a merger agreement under which Covidien will acquire all of the outstanding shares of Somanetics Corporation (SMTS) for $25.00 per share in cash, for a total of $250 million, net of cash acquired. According to Somanetics Corporation its Board of Directors unanimously approved the transaction.

Shares of Somanetics Corp (SMTS) traded at $18.90 per share before the news, but were down from its 52weekHIgh of $21.96 per share, $27.79 per share in 2008, and $36.17 per share in 2005.

The investigation by a law firm concerns whether the Somanetics Board of Directors breached their fiduciary to Somanetics (NASDAQ:SMTS) stockholders by failing to adequately shop the Company prior to supporting the agreement, whether the Board of Directors breached their fiduciary duties by not seeking a deal that would provide better Somanetics Corporation, and whether Covidien plc is underpaying Somanetics Corporation (SMTS), thus unlawfully harming SMTS stockholders.