Appeal was filed, which will have the affect of delaying by several months the payment of the settlement funds.
As from the very first settlement about a year ago, when it was rejected by Judge Borok, I have been saying that his original decision misunderstood the nature of a shareholders derivative action.
A shareholders derivative action is filed ON BEHALF OF THE CORPORATION, and not on behalf of a group of shareholders at a particular point in time.
The appeal is based on that same mistaken notion of a shareholder's derivative action, and will not prevail.
Had the appellants grought their own action, at or around the time of the corporate "looting" as they call it, they might have grounds to be compensated.
But they did not.
Instead a group filed the shareholder's derivative action, and that means that the law cannot make an award to any entity EXCEPT the corporation itself, with provisions excluding the shareholders who perpetrated the wrongful acts. That's what the settlement does, and I have no doubt it will be upheld on appeal.
It's not a close call. For those who still want to take advantage of this situation, the share price may slip a bit here, and you can make the difference between the share price and the payout amount, which is calculated to be about $31.00 a share, plus the residual value of the company shares, that you will still own after the payout.
It can only be hoped that the Court of Appeals expedites this appeal and its decision, as this is a pretty easy call.
