After the board members of Todd Shipyards Corp agreed to a takeover of Todd Shipyards Corp. at $22.27 per share by Vigor Industrial LLC an investigation on behalf of investors in Todd Shipyards Corporation (NYSE:TOD) questioning whether the offer to take over Todd Shipyards Corporation and the sale process are unfair to Todd Shipyards investors was announced.

The investigation by a law firm concerns whether certain officers and directors at Todd Shipyards Corporation breached their fiduciary duty owed to the shareholders of Todd Shipyards Corporation (NYSE:TOD) arising out of their attempt to sell Todd Shipyards Corporation to Vigor Industrial LLC.

On Thursday, Dec. 23, 2010, Seattle based Todd Shipyards Corporation and Vigor Industrial LLC announced that they have entered into an agreement under which Vigor Industrial LLC will acquire the stock of Todd Shipyards Corporation (NYSE:TOD) for $22.27 per share, or approximately $130 million. Todd Shipyards Corporation (NYSE:TOD) said the offer represents a premium of 31% over the average closing price of Todds common stock during the three month period ended December 21,2010.

But shares of Todd Shipyards Corporation (TOD) traded on Wednesday at $21 leaving Tod shipyards investors with a meager premium and began trading on Thursday in response to the buyout news at $23.25, thus above the current offer and leaving Todd Shipyards investors with no premium at all but rather giving Vigor Industrial LLC a discount over the open market stock price. In addition Todd Shipyards Corporation has performed well for its shareholders in the past. Todd Shipyards reported year-over-year revenue growth of 68% and $7.8 million in earnings, up from $2.1 million in the same period of 2009. Todd Shipyards Corporation 12month Total Revenue went from $125.49million reported on April 1, 2007 to $180.02million reported on March 28, 2010. Its Net Income for the same time frame went from $3.71million to $7.81million.
Therefore the investigation concerns whether Todd Shipyards Corporation and certain of its officers and directors breached their fiduciary duties owed to Todd Shipyards Corporation (NYSE:TOD) investors by failing to undertake an adequate and fair sales process to obtain fair consideration for all shareholders of Todd Shipyards Corp. (TOD) and by agreeing to an offer that undervalues Todd Shipyards Corp. A potential class action lawsuit would seek to maximize the amount of money and information Todd Shipyards shareholders would receive in a buyout, so the law firm.

Further the investigation focuses on whether the Todd Shipyards Corporation and its board of directors breached their fiduciary duties to Todd Shipyards (NYSE:TOD) shareholder by failing to adequately shop the Company before entering into any transaction.