Thomas Nelson shareholders have filed a lawsuit to stop the company's sale to InterMedia Partners VII LP, a private equity investment firm.

The suit was filed in the Chancery Court for Davidson County, Tenn., on Feb. 24. The action alleges that the director defendants breached their fiduciary duties by, among other things, pursuing a transaction without regard to its fairness to all shareholders, and without allowing for a competitive bidding process, according to the company's proxy statement filed with the Securities and Exchange Commission. The action also alleges that other acquisition proposals were discouraged.

“We believe the suit is without merit and intend to defend against it vigorously,” the company said in the proxy statement.

Thomas Nelson, which has been publicly held since 1969, is aiming to finalize the deal, which is subject to shareholder approval, by June 30. If the sale is completed, Thomas Nelson will become a wholly owned subsidiary of Faith Media, an affiliate of InterMedia Partners.