Barrack, Rodos & Bacine Announces An Investigation Into Builders FirstSource, Inc.

9/3/2009 - Barrack, Rodos & Bacine is investigating potential claims against JLL Partners, Inc. ("JLL"), Warburg Pincus LLC ("Warburg Pincus") and the board of directors of Builders FirstSource, Inc. (Nasdaq: BLDR) ("Builders FirstSource" or the "Company") related to the recapitalization plan proposed on September 1, 2009, by JLL and Warburg Pincus.

Under the terms of the recapitalization proposal, Warburg Pincus and JLL, which collectively own approximately 50% of the outstanding shares of the Company, offered to exchange $98 million of floating rate Builders FirstSource notes that they own and that are due to mature in 2012, for 49 million shares of common stock valued at $2 per share. The remaining noteholders will be permitted to exchange their notes for new notes due to mature in 2017 at 75% of par value, or some combination of new notes and common stock valued at $2 per share. In reaction to the announcement of the recapitalization plan, shares of Builders FirstSource dropped more than 35%, falling from $7.69 to $4.98 per share, and continued their decline to close at $4.31 per share yesterday.

The investigation concerns possible breaches of fiduciary duty and other violations of state law related to the reorganization proposal made by JLL and Warburg Pincus, which collectively are owners of a majority of the Company's common stock, and the board of directors of Builders FirstSource. If you own shares in Builders FirstSource and would like to learn more about these potential claims or wish to discuss the matter further, please contact BR&B partner Jeffrey Golan by telephone at (215) 963-0600, or by email at jgolan@barrack.com.