An investigation on behalf of current long term shareholders in SouthWest Water Company (Public, NASDAQ:SWWC) over potential breaches of fiduciary duty and other violations of state law in connection with an alleged unfair takeover was announced.

The investigation by la aw firm focuses on potential breaches of fiduciary duty and other violations of state law by the Board of Directors of SouthWest Water Co. arising out of their attempt to sell SouthWest Water Company (NASDAQ:SWWC) to institutional investors. SouthWest Water Company, located in Los Angeles, California, operates and maintains water and wastewater infrastructure. SouthWest Water Company reported in 2007 Total Revenue of $212.50million with a Net Income of $6.25million, in 2008 Total Revenue of $214.88million with a Net Income of $1.59million, and in 2009 Total Revenue of $220.85million.On Wednesday March 03, 2010, SouthWest Water Company (NASDAQ:SWWC) announced it has entered into a definitive merger agreement to be acquired for approximately $275 million in cash, or $11.00 per share, by institutional investors advised by J.P. Morgan Asset Management and Water Asset Management L.L.C. According to SouthWest Water Company the Board of Directors of SouthWest Water unanimously approved the agreement and the offer represents a 56% premium over SouthWest Water's closing share price on March 2, 2010 and a premium of 71% over the average 30-day closing price ended March 2, 2010.

Shares of SouthWest Water Company (NASDAQ:SWWC) traded at $10.50 per share after the announcement and at $7 per share the day before the news.

But according to one investigation by a law firm the transaction appears to be unfair to current investors of SouthWest Water Company (Public, NASDAQ:SWWC) because the offer to purchase SouthWest Water Company (SWWC) at a value of $11.00 per share appears opportunistically timed to take advantage of the current economic downturn and is grossly unfair, inadequate, and substantially below the fair or inherent value of SWWC.

SWWC shares were down from $13 per share in 2008, $15 per share in 2007, and $18 per share in 2006.

The investigation concerns whether the SouthWest Water Co. Board of Directors breach their fiduciary duties to SouthWest Water Company (NASDAQ:SWWC) shareholders by failing to adequately shopped SouthWest Water Co. before entering into this transaction and whether the institutional investors advised by J.P. Morgan Asset Management and Water Asset Management L.L.C. may be underpaying for SouthWest Water Company, thus unlawfully harming SWWC shareholders.