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Legal firm Levi & Korsinsky claims to have launched an investigation into the actions of Cedar Fair's board after it agreed to sell the theme park firm for $635 million.

The deal, announced yesterday, will see asset manager Apollo Management LP take control of Cedar Fair's 11 theme parks and 7 water parks - including Knott's Berry Farm, Kings Island, Carowinds and Kings Dominion. The firm will also take on Cedar Fair's $1.7 billion debt as part of the deal.

Levi & Korsinsky's website invites Cedar Fair shareholders to join a potential class action lawsuit against the company's board. The law firm says it is investigating whether the board breached its fiduciary duties to shareholders, having agreed to a sale that will see shareholders receive $11.50 per share. As recently as last summer, Cedar Fair shares were trading at over $20, and its shares were still trading at $12 on August 3.

Cedar Fair struggled throughout 2009, suffering a 6% decrease in attendances compared to the previous year. This led some observers to question the firm's financial security, with a recent column on investment site The Motley Fool drawing parallels between Cedar Fair and Six Flags (which filed for bankruptcy protection earlier this year).

Despite its debt problems, Cedar Fair has invested significantly in new rides at some of its parks for the 2010 season. Carowinds is spending $23 million on its Intimidator rollercoaster, Kings Dominion has invested $25 million in sister coaster Intimidator 305, and flagship park Cedar Point is installing water ride Shoot the Rapids at a cost of $10.5 million.

It is not yet clear what the impact of the Apollo deal will be on park-goers. Cedar Fair's current management team have been asked to remain in place following the takeover.

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