Wait ... this is unusual. According to a piece by Tom Hals of Reuters, the lead plaintiff - not his
lawyer, but the lead plaintiff himself - is opposing settlement of the
shareholder litigation in the J Crew transaction. The J Crew MBO was on the
receiving end of a shareholder lawsuit and for good reason (here, here, and here). The litigation moved towards settlement and
then ran into some trouble when the plaintiffs counsel threatened to take the
whole thing to trial. Then the litgation kind of disappeared off the
radar. Now, it's back.
Martin Vogel, one of the named lead plaintiffs in the J
Crew shareholder litigation, is refusing to settle the case. And, he's
asking uncomfortable questions:
When "lawyers tell you that you absolutely must
settle this case for a smidgeon of additional money which in no way begins to
address the actual damages, one cannot help but wonder whether a fatal conflict
of interest has arisen between counsel and the class," Vogel said
Vogel is looking to get rid of his counsel in this case
and then litigate it rather than settle. For anyone familiar with the
typical role played by shareholder plaintiffs in these cases, this move is
pretty unusual. Shareholder plaintiffs normally not even seen, much less heard
when it comes to these kinds of cases. Of course, in the post-PSLRA
period, we are getting used to more vocal shareholder plaintiffs in the Federal
courts, but that's not yet the rule in the state courts where the quasi-mythical shareholder plaintiffs like Alan Kahn are
still quite active. But still this is a little unusual. It may be that
there are issues, internal to the plaintiffs' executive committee about
strategy that has led to one of the named plaintiffs to speak out. Hard to say.
In any event, it'll play itself out in front of Chancellor Strine tomorrow.
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