M&A Law Firm Questions Value of Zenith Merger

A San Diego law firm, Robbins Umeda LLP, has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by Woodland Hills-based Zenith National Insurance Corp.’s board of directors.

Zenith has entered into a merger agreement with Fairfax Financial Holdings Ltd. of Toronto in which Zenith shareholders will receive $38 per share of common stock in cash. The transaction is expected to close in the second quarter of 2010.

If the transaction closes, Zenith will become a wholly-owned subsidiary of Fairfax, and will continue to operate from its Woodland Hills headquarters.

Robbins Umeda represents investors in mergers and acquisitions. The firm said it is concerned about whether the Zenith board's acceptance and recommendation of Fairfax's offer was fair and designed to secure the best possible price for all Zenith shareholders. The firm did not disclose whether or not it represents Zenith shareholders.