An investor that owns more than 150,000 common shares of United PanAm Financial Corp. (Public, PINK:UPFC) filed a lawsuit in State Court against UPFC, its directors, including its Chairman Guillermo Bron, and certain other entities over alleged breaches of fiduciary duties in connection with the proposed merger .
According to the complaint the plaintiff alleges that the proposed merger is the product of unfair dealing and is at an unfair price.

On December 28, 2010 United PanAm Financial Corp. (OTC: UPFC.PK ) announced that it has signed a merger agreement to be acquired by an entity controlled by its Chairman Guillermo Bron and by affiliates of Pine Brook Road Partners, LLC, a private equity firm. Under the terms of the definitive merger agreement, United PanAm Financial Corp’s shareholders will receive $7.05 per share in cash in exchange for their UPFC shares, valuing all outstanding shares of UPFC’s common stock at approximately $110 million.
United PanAm Financial Corp. said the $7.05 per share price represents a 41% premium to the closing price of UPFC common stock on December 27, 2010, a 39% premium to the average daily closing price of UPFC common stock for the 30 days prior to December 27, 2010 and a 73% premium to the average daily closing price for the 12 months prior to December 27, 2010.

But the plaintiff claims the entity that will be acquiring UPFC if the merger is approved by shareholders is controlled by Chairman Guillermo Bron and his affiliates, which own approximately 38% of the shares of common stock. . In addition, the directors comprising the Special Committee of UPFC, who together own approximately 4% of the shares of common stock, have also agreed to vote their shares in favor of the transaction. Chairman Guillermo Bron, as United PanAm Financial's largest shareholder, and the other directors who approved the merger, owe a duty to shareholders to obtain a fair price pursuant to a fair process, so the lawsuit. But the plaintiff claims a fair process did not occur because, among other things, there is no indication that United PanAm Financial Corp was shopped to other potential purchasers, or that the proposed merger represents the best offer available.
Furthermore the plaintiff alleges that, based on the publicly available information, the proposed merger price of $7.05 per common share is facially inadequate and significantly below the book value of United PanAm Financial Corp. at the time of the announced merger.