It looks as if another step has been taken in what has been a long process for shareholder Michael Hartlieb. Mr. Hartlieb has formed an organization called "Save Sirius", and has now filed a suit in U.S. District Court in Los Angeles. The suit accuses management of violating the federal Racketeering-Influenced and Corrupt Organizations act, breach of fiduciary duty, and violation of the Sherman Act.

Mr. Hartlieb has been vocal on various situations with regard to Sirius, XM, and the merger for a few years now, and up until recently has been acting on his own with regard to his various concerns. Now, it appears that he has formed an organization of about 500 shareholders that have joined him in his efforts.

According to a press release issued today, which this publication had no prior knowledge of, the current effort is to stop a potential vote at the Sirius XM annual meeting to be held December 18th, on increasing the fully diluted share count to 8 billion, as well on a vote regarding a potential reverse split.

In a statement from the press release, Michael Hartlieb said, "We are working to gain control of our company by seeking to remove current members of the board as well as top executive Mel Karmazin."

The press release, as well as the lawsuit, outline what can only be termed as some serious accusations. This publication has seen no "smoking gun" that directly ties the company to certain activities listed in the complaint. There is indeed a lot of circumstantial points that could be theorized about, but whether the theory translates to reality, or can be proven is another matter altogether.

Some of what is alleged as a breach of fiduciary duty simply boils down to a matter of debate.

Save Sirius complains about Sirius XM's "history of locking their shareholders into the longest merger delay in history," as well as its "preventing the corporation from seeking alternatives or potential suitors." The flip side of the argument is that there was no way to know that the merger would become as long and drawn out as it did, and that the best situation would be for a merger of all of the spectrum (between Sirius and XM), rather than one company being absorbed into a mega company such as Google.

Fiduciary duties are a huge responsibility, and any company can only act on what they know at any given point in time. What transpired in the markets over the past few months was likely beyond what almost anyone would have imagined. Personally, the company going private at low level prices such as we currently have is a large concern of mine. There are shareholders who would be hurt by this happening, but there are also shareholders who would benefit. The question is which group is larger, and that is an unknown right now.

My opinion on this matter (and let me be clear that I am not a financial or legal advisor), is that there is not enough concrete evidence to allow some aspects of this suit to ultimately be successful. While the share price is frustrating, an it is easy to look back in hindsight to see that differing actions may have gotten better results, neither will be a smoking gun.

There were a lot of moving parts in trying to get the merger approved, and the financial markets had wild cards that would have been very difficult to predict. Was there a point in time when it may have been better to walk away from the merger? That is a matter of debate. The impact of a failed merger would have had it's own implications, and certainly there would have been people that questioned the move.

We have not seen the Q3 results as yet, and these will be the first financial results of the merged company that will be made public. Taking a stance on whether the company has breached financial duties without seeing the financial position of the company is a difficult leap for me to take.

What if the numbers are released, and many of the synergies Mel has spoken of are coming to fruition?

What if the recent debt buyouts are a precursor to a very good refinancing of the February debt?

What if the increased float and reverse split options only exist because it is required to satisfy NASDAQ's requirements (if needed), and the company wants to vote on it now rather than spend additional money to bring about a special vote later on?

What if the company puts out a better third quarter than anyone anticipated, and the market reacts positively?

Simply stated, there are too many what if's out there at this point for me to participate in an action such as that being brought about by Save Sirius. This is not to say that Save Sirius is right or wrong. It is merely my own opinion. Yes, shareholders have every right to be nervous and concerned. The equity has taken a beating, and many who have been in this equity for a long time have yet to see the reward for their belief in the concept of satellite radio.

Investors need to look at issues from as many angles as possible. They need to determine how comfortable they are under many circumstances, and be prepared for events that many simply never imagined.

The bottom line is that Sirius XM Radio as well as shareholders are all in a difficult situation, and trying times.

Position: Long SIRI

Note:This site had no prior knowledge of the press release or that the suit would be filed today. The author of this article is not a part of Save Sirius, nor a participant in the actions of Save Sirius.