Phrantic, to take your scenario a step further, after the feeding frenzy, the price will rise and fall dramatically as each suit develops. Each suit will be filed separately and usually each defendant will stand on their own. As the box score goes one way or another on each case, the stock will rise or fall in steps.
Obviously to you savvy traders this will present a trading opportunity at each step. If you know how to play this, you could make a nice profit far beyond the value of the stock.
All in my humble opinion, of course!