A large shareholder in Penn Treaty American (NYSE:PTA) demanded that the company immediately hire an investment banker in order to explore strategic alternatives including a possible sale of the company, according to a Schedule 13D filing with the SEC. Shareholders are hoping that the company will heed this advice and unlock value in the troubled company.

Monarch Activist Partners, which owns less than a five percent stake in the company, believes that the company's shares are worth upwards of $10 per share and the only way for investors to realize this value is through a sale of the company. In conversations with other shareholders and professionals, they believe that the company is current in its statutory filings, a sale of the company would not be dependent on GAAP financials.

"We believe PTA's Directors are in breach of their fiduciary responsibility by letting the financial reporting issues persist indefinitely without pursuing strategic alternatives," said Monarch's James Chadwick. "If PTA does not hire an investment banking firm to pursue alternatives and add shareholder representatives to the board immediately we intend to take action to unseat the board in the next shareholders' meeting."

All in all, this is great news for shareholders as it means that PTA shares may finally come to value. The activist hedge fund is likely to see support from other institutional investors too - making their campaign for changes likely to result in something. Combined, these factors make PTA a stock worth watching!

Related Companies
KMG America Corporation (KMA)
Conseco Inc. (CNO)
FBL Financial Group (FFG)