Shareholders Sue ARV

ARV Assisted Living Inc., trying to fend off a hostile takeover bid, said Monday that it has been sued by shareholders who accuse executives of failing to “take the steps necessary to maximize shareholder value.”

ARV said it was officially served Friday with a copy of the lawsuit, filed Dec. 12 in Orange County Superior Court.

The lawsuit challenges an ARV deal that redeemed $60 million in notes held by a unit of Lazard Freres & Co. in New York in return for a 39% stake in the company. It also alleges that ARV wrongly refused to “properly” consider the hostile $17.50-a-share bid by Emeritus Corp. in Seattle.

ARV said that the suit is “without merit” and that it will “contest it vigorously.”

The shareholder suit, filed by a Pacific Palisades law firm, seeks class-action status as well as unspecified damages.