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Thread: The Suit

  1. #11
    hartleib1 is offline
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    Friday, February 22, 2008
    Judge to California lawyers: Don't come backTriangle Business Journal - by Chris Baysden
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    "In short, he lacked any credentials to act as a fiduciary for a company in multimillion dollar litigation," Tennille wrote in his order. "The (law) firm should have been aware of his holdings and inexperience."

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    Egelhof and his representatives at Robbins Umeda & Fink failed to communicate with each other about the case to such an extent that one of the plaintiff's lawyers who appeared before the court "knew absolutely nothing about his client," wrote Tennille.

    After being asked by the judge to determine their client's Red Hat holdings, Robbins Umeda & Fink representatives eventually found out that Egelhof had sold his shares of Red Hat stock for $756.98 on Dec. 31, 2005.

    Shareholder derivative actions and class-action lawsuits often are settled because they are expensive to defend. But Raleigh-based Red Hat, which was founded in 1993 and employs about 2,000 people, decided to take a stand against what it considered inappropriate legal conduct.

    "When it does occur, we don't shy away from taking it on," says Red Hat General Counsel Michael Cunningham.

    Neither Cunningham nor Millen would disclose how much it cost to fend off the lawsuit. Local business lawyer Larry Robbins, who is not involved in the case, estimates that such an action could cost defendants in the range of $250,000 to $500,000.

    While Millen and Cunningham hope that the case will help discourage shareholder suits, UNC business law professor Tom Hazen views it simply as the court's reaction to the performance of the lawyers involved.

    "I would imagine that it must have been pretty bad for him (Tennille) to react this way," Hazen says. "It certainly is a serious slap in the face to their firm."

    In addition to the sanctions on Robbins Umeda & Fink, Tennille specifically prohibited three of the firm's lawyers from appearing pro hac vice in North Carolina for five years. Managing Partner Brian Robbins said, " ... we plan on appealing that decision."

    Charlotte attorney Lane Williamson, who acted as local counsel for Egelhof, did not return messages seeking comment. Williamson was not sanctioned in the judge's order.

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    Last edited by hartleib1; 03-25-2008 at 02:54 AM.

  2. #12
    hartleib1 is offline
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    After being asked by the judge to determine their client's Red Hat holdings, Robbins Umeda & Fink representatives eventually found out that Egelhof had sold his shares of Red Hat stock for $756.98 on Dec. 31, 2005.

    PLEASE!!

  3. #13
    TSavery is offline
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    Clueless

    Here it is in a nutshell.

    1. When a lawsuit is given class status, it becomes a lawsuit on behalf of the entire class. In this case, the class is the shareholders.

    2. Brockwell and Johnson were shareholders that felt that not enough detail was given to shareholders so that they could make a fully informed decision when voting on whether or not to approve the merger.

    3. Instead of being very specific in their allegations, Brockwell and Johnson stated that the management of Sirius, and the Board of Directors "breached their fiduciary responsibility to the shareholders" with regard to the merger.

    4. The settlement gave the class (shareholders) about 6 paragraphs of additional information to shareholders prior to the vote. In my opinion, this additional information was virtually worthless.

    5. The settlement also gave management and the Board of Directors broad security.

    6. You can not be sued for the same thing twice. This suit basically gives the BOD and management a green light on virtually any aspect of the merger. This is because in theory they satisfied the class (shareholders) with regards to their full fiduciary responsibility in the suit by adding the additional information prior to the shareholder vote.

    7. Thus, in exchange for what amounts to 6 paragraphs of worthless information, we as a class (shareholders) will be giving up our right on any claim connected to fiduciary responsibility with regard to the merger.

    It is my opinion that the value of what was received by the class is nothing, but potential rights have been given up. Picture selling your house to someone for a dollar. Such a deal is not worth it.

    Now, as a shareholder I have to place a certain amount of trust in the management and Board of a company I invest in. If things go terribly wrong, I would always have the ability to sue to get the wrong righted. If this class action settlement is approved, I will no longer have that right. That means that the level of trust I have to have has increased a great deal, because my safety net has been removed.

    I take exception to this suit because:

    1. It takes a certain level of concern to go through the process of obtaining counsel, filing a suit, and getting a class action status. The concerns of Brockwell and Johnson must have been very grave concerns to go through all of this trouble.

    2. In the end, they got Sirius to disclose additional information about the merger decision, but in my opinion this information was paltry, and in my opinion did not change the results of the vote in the slightest way. Yet somehow, this virtually worthless information seemed to satisfy the grave concerns of Brockwell and Johnson. It does not add up.

    3. Now, the class will have no recourse should there indeed be an issue with the fiduciary responsibility of management and the board.

    These are the reasons that I intend to opt out of this suit. I got nothing, and am being asked to give up my safety net. I trust the BOD and Management a great deal, but not enough to give up my safety net. I would never give this up with any company, and in particular, not for the peanuts that I am being asked to in this case.

    Mr. Haltlieb is contributing the legal findings. The information is valuable to shareholders. Shareholders should read it and weigh their options. In the end, are you willing to give up your safety net for a few paragraphs of information about the merger decision?
    Tyler Savery
    Satellite Standard Founder

  4. #14
    clueless is offline
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    That's cool but, what the hell is this guy posting chunk after chunk of meaningless unformatted text from some word processor. Based on what I can find from this guy posted in various places, I think he might be batshit crazy.

  5. #15
    Newman is offline
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    Quite a few people think that Clueless. Ask the people on the Orbitcast forums...

    On the other hand, he has done a huge amount of research into the matter. He has the money and time to spend on it, after all he is a California real estate broker... and you know how much time brokers have in Cali right now with the housing market....

    Everything he has posted are letters written to the judge in the suit, articles posted in various online articles/magizines, etc etc etc.


    What I find most impressive: His FCC filings actually make it to the FRONT page along with Clear Channel, NAB, and XM/Sirius. They are not barried in the normal comments section. That gives him at least some credibility in my opinion.

  6. #16
    TSavery is offline
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    clueless

    The information being posted gets quite detailed, and brings to light various aspects of several issues. Some may want to see all of that detail, others may not.

    Some items have a certain amount of speculation based on various factors that do not show an issue in clear black and white, but demonstrate plausible situations.

    Boiling this down to the simple question is what I have done. Is the class action suit worth participating in? IMO the answer is no.

    Aspects such as interoperability, OEM deals, codecs, satellite capabilities, chipset capabilities, etc. have varying dgrees of importance to many people.

    As I have said for quite some time....There are Sirius shareholders who feel that the price for XM is to high. There are XM shareholders who feel they did not get enough. My opinion is that the deal was not a winner, nor a loser for eaither company, and thus pretty fair.
    Tyler Savery
    Satellite Standard Founder

  7. #17
    Newman is offline
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    Any update on the Class Action?

    Hartlieb, weren't you supposed to attend the hearing this past Friday on the 4th? Any news from that?

  8. #18
    hartleib1 is offline
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    April _, 2008

    Re: Brockwell v. Sirius Satellite Radio (Index No. 600819/07)


    The Honorable Richard B. Lowe III
    The Supreme Court of the State of New York
    County of New York
    100 Centre Street, Room 1735
    New York, N.Y. 10007

    Dear Justice Lowe:

    As you know from my filings attempting to intervene in the reference case, I am a shareholder of Sirius Satellite Radio and have been for a number of years owning hundreds of thousands of shares.

    The purpose of this letter is to respectfully bring to your attention facts that it is submitted are important to your consideration of the letter sent to you April 3, 2008 by Jonathan K. Youngwood of Simpson Thatcher & Bartlett LLP purporting to address “Your Honor’s concerns regarding the form of notice to be provided to the class in this action.”

    While I am no lawyer, it strikes me as odd that Mr. Youngwood states that he and his firm filed the April 3rd letter “jointly on behalf of the defendants and the plaintiffs.” (emphasis added) The issue, of course, is what type of notice is required to properly inform the Sirius shareholders of the proposed settlement of the class action. As a shareholder, one of the reasons I have filed to intervene in this case is because the so-called notices given and proposed by Sirius are devoid of any meaningful information by which a shareholder can judge the merits of the settlement of this action or of the merits of the merger itself.

    Disagreement with the adequacy of the shareholder notices creates, in my understanding, a conflict of interests between Sirius and the class. I do not, therefore, understand how Mr. Youngwood gained the authority, if he did, to represent opposing interests. The Court may wish to inquire about the circumstances that surround Mr. Youngwood’s purported representation of the defendants and the plaintiffs in this matter.

    Mr. Youngwood offers as support of Sirius’s position that direct mail notification to all shareholders would impose an economic hardship on Sirius. He cites the facts that “Sirius reported a loss of approximately $1 billion during the year ended December 31, 2006, and a loss of additional $500 million for the year ended December 31, 2007.” He goes on to say that “Respectfully, an additional $1 million is a meaningful sum to Sirius, especially in this difficult market.” The Court may wish to reflect on these representations in light of these facts. Sirius is merging with the only other satellite radio network provider that exists – XM Satellite Radio – and will become the sole provider of satellite radio services.

    The proposed merger is valued at $5 billion and its approval has been cleared by the Department of Justice and it is expected that the Federal Communications Commission that regulates Sirius and XM will grant its approval this month.

    Mr. Karmizan, Sirius’s CEO and reputed CEO of the merged entity has been criticized for his compensation package that is in the neighborhood of $30 million a year. The cost of shareholders direct notice then would be 3% of Mr. Karmizan’s salary for one year and infinitesimal compared to the value of the $5 billion merger itself.


    Mr. Youngwood cites its “public disclosure” of “the proposed settlement in its November 5, 2007 Current Report on Form 8-K (the ‘Supplemental Disclosure’), and that filing remains posted in the ‘Investors Relations’ section of Sirius’ website.” One of the reasons I sought intervention is my strong objection that these so-called notices are meaningless claptrap. They provide no notice to shareholders of any substantive terms of the settlement or why it is in their interests. Moreover, I have statements from Sirius representatives that admit that these so-called disclosures are meaningless and the only reason the firm representing the plaintiff agreed to settle this case is because they “liked the check”.

    Since the notice is itself completely inadequate and uninformative, Mr. Youngwood’s offer to publish it by other means begs the question. No matter where the notice is published it will fail to inform shareholders about what they need to know. That being the case, a notice sent directly to each shareholder will not solve the problem. But what Sirius and its counsel’s arguments reveal is that they know the notice is deficient and do not want to risk notifying shareholders directly because, if they do, there would likely be shareholder repercussions.

    Mr. Youngwood shows unusual temerity by making a not so veiled threat that if direct shareholder notice is provided it would consider amending the terms of the settlement and withdraw Sirius’s request for preliminary approval. I believe that this would actually benefit shareholders and are actions that should be taken. One must wonder then why using such actions are believed to support the relief requested. It seems that it suggests that the Court would be concerned if the request for preliminary approval were withdrawn. Not being a lawyer, I don’t understand why the Court would be concerned about such an action.

    I respectfully request that the Court consider the matters raised in this letter. They are submitted in the interest of all shareholders and in the integrity of the judicial process.

    Respectfully submitted,


    ________________________________
    Michael Hartleib

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