CLASS ACTION GONE BAD? WHAT DO SHAREHOLDERS DO? - Segment 6 Of A 6 Part Series
Segment 1 - Class Action Gone Bad? You Be The Judge
Segment 4 - Class Action Gone Bad? - The Proposed Settlement
Segment 5 - Class Action Gone Bad? The Class Action Attorney
First and foremost, each investor has to arrive at their individual respective decision. I am not a financial advisor, nor am I a legal advisor. I fully encourage investors to do their own research and consult with appropriate professionals prior to making a decision on this matter. My opinion is my own. Information pertaining to the parties in this case is available by general means either on the Internet, or via the courts. What I have published is simply a very broad overview of this particular case. There is enough depth here to write a book.
In looking at this situation, I have arrived at the following:
1. A merger was announced
2. Greg Brockwell filed suit only 24 days after the announcement, and prior to seeing the proxy statement.
3. The law firm hired by Brockwell specializes in class action suits, and has “recovered” many millions over the past years. Class actions is their expertise.
4. Some activities in the class action suit arena leave me wondering whether it is the class that is getting the benefit. Cases settle for minimal benefit, and plaintiffs that seem to have a litigious history leave me questioning the process and the benefit of class action suits as a whole.
5. This case was brought before a State court instead of Federal court. Federal Court likely could have rejected the case (in my opinion) because of the litigious history of the plaintiff.
6. The size of Brockwell’s investment, in my opinion, does not jive with the actions he took.
7. The settlement includes indemnifications for Sirius that take away some of my rights as a shareholder with respect to the merger value being proper. If it turns out that there is indeed something that would have materially impacted how I would have voted, I would lose that right if I remained a member of the class. Even opting out does not guarantee me my rights, but what type of choices do I have?
8. The settlement revealed what I consider to be useless information filed in an 8K by Sirius prior to the shareholder vote. There is no other "benefit" forthcoming from the settlement.
9. The settlement includes the payment of attorney fees to RUF Law. The amount of those fees are unknown.
Given what has transpired, the decision for me is an easy one. I plan on opting out of the suit should the settlement accepted by the court. I, as a shareholder saw no real value in the additional information that the Plaintiff was able to get as a result of his suit. As a shareholder, I consider it outrageous that Sirius will have to pay any fees to the attorney in this case.
Personally, I find the plaintiff in the case to be an individual who is prone to filing suits. I find it curious that someone who seems to have had such bad experiences in the stock market continues to invest in it. I find that the size of the plaintiff’s investment measured against the actions he has taken to not "gel" with what would normally be expected. I do not see the settlement disclosures as material enough to have satisfied the “concern” that was exhibited by Greg Brockwell.
I do not have a level of comfort and trust in Jeffery P. Fink, the attorney who worked this case, nor his firm. I find the activities surrounding this case to be opportunistic, but that is merely my opinion. Others may indeed see value in what has transpired.
I find that the actions that have happened cause me a great deal of concern as to how the equities markets operate, and how our legal system allows such activities to happen. I fully understand that "this is how it is", but that does not make it "right" or "just".
Whenever a person invests in a company, they need to place a certain amount of faith and trust in the management of that company. I have a level of faith and trust in Sirius as well as XM. However, that faith and trust is never 100%. I would much rather opt out of this suit and have a safety net than be included and get what I consider meaningless information. I feel that what I am being asked to give up has far more value to me than the few paragraphs that Brockwell and Fink propose as a settlement.
The goal of this series was to get information to investors so that they can make a fully informed decision about whether or not to be a member of the class. Ironically, it was the stated position of the plaintiff and his attorney that they wanted additional information published so as to allow investors to arrive at a fully informed decision on the merger vote. Given their stance in the very beginning, of allowing the class to be fully informed, they should not take any exception to what I have published.
I am invested in SDARS because I believe in the technology, the concept, and the long term business plan. I intend to hold onto my investment in this sector. The activities described in this article do not change my belief in SDARS.
It is my sincere hope that the all of the circumstances presented are a coincidence beyond what can be imagined. Realistically though, I do not trust that many pieces to simply fall into place by happenstance.
In the end, each individual needs to ask themselves whether the additional information supplied prior to the shareholder vote had value? You also need to consider that remaining in the class may not give you any new or relevant information going forward. If you have already seen the settlement, what more do you have to gain by being in the class? What do you have to lose? Only each individual can arrive at an answer to these questions.
Consider me as “opted out” in this suit. I must caution that readers and investors alike should do their own research and consult with financial and legal professionals prior to making their own decisions.
Position - Long Sirius, Long XM