With more than $420 billion of leveraged buyouts so far this year–more than triple the amount in the year ago period–you can bet that deal makers, their bankers and their lawyers are pretty busy these days.

But don’t forget about the lawyers who represent public company shareholders. Reuters reports that private equity has become a hot area for plaintiffs attorneys too. These lawyers are challenging buyouts of Lear Corp. and Topps Co Inc. among others. The latest legal case challenging a leveraged buyout aims at the Ceridian Corp. deal. The article says:

Typically in these cases, shareholders argue that managers accept low-ball offers because they have cut lucrative deals for themselves with the buyers that might allow them to continue running the company and get an equity stake in the new private entity. 
 
“You have private equity getting into bed with management,” said shareholder lawyer Seth Rigrodsky. “We are very concerned about the process in which these companies are being sold.”

“These suits are an effective tool to make sure that the boards of these companies understand that they have to do what’s right for shareholders,” said plaintiffs’ lawyer Gerald Silk. “If you put yourself up for for sale, you have to go out and get the best price.”

(Photo: Carl Ichan, Reuters file)