Holders of convertible notes claimed, through their trustee, that the acquisition of the note-issuing company triggered their right, under the trust indenture, to receive cash or stock if and when a "Public Acquirer Change of Control" took place. "Public Acquirer", according to the indenture, meant a person that "has a class of common stock traded
Antitrust
Fifth Circuit Persists in Call for Proving Case as Price for Class Treatment
By Barry Barnett on
Blawgletter thinks we don't go over the line when we say the Fifth Circuit deserves its rep as the court of appeals least likely to abide a class action.
Fresh proof came last week. The court upheld the denial of class treatment in a securities fraud case against Halliburton. It said, in a footnote:
Plaintiff
…
Hiding of Fee Rebates May Cost Citigroup
By Barry Barnett on
On Monday, the Second Circuit reversed dismissal of a securities fraud case against Smith Barney/Citigroup for misleading mutual fund investors about the true cost of "transfer agent" services, for which the mutual funds paid an outside vendor. After a few years, the transfer agent, at SmithBarneyCitigroup's request, started rebating most of the fees to SmithBarney/Citigroup. SmithBarney/Citigroup…
Multidistrict Litigation Panel Sets Hearing Dates, Sites for Balance of 2010
By Barry Barnett on
The U.S. Judicial Panel on Multidistrict Litigation convenes every other month to hear argument on motions to centralize or consolidate multidistrict cases for pretrial proceedings in one district court. The Panel's members hail from around the country and gather for Panel hearings at a variety of places, too.
Last month, the MDL Panel met in…
What PSLRA Has Wrought; “Pay-to-Play”?
By Barry Barnett on
The Private Securities Litigation Reform Act of 1995 got its start as a subclause in the Contract with America. Congress overrode a veto by President Bill Clinton to pass it.
Has it panned out? The WSJ cast light on the question today.
The item focused on how much some class action law firms give to…
WSJ on Antitrust
By Barry Barnett on
Blawgletter's favorite source of business news — The Wall Street Journal – today presents a longish item on antitrust enforcement — "U.S. Trustbusters Try to Reclaim Decades of Lost Ground".
The piece notes three recent cases in which the Supreme Court has lately rejected antitrust claims (Trinko, Twombly, and Leegin).…
Apple Wins, Loses in Options Backdating Case
By Barry Barnett on
Backdating an employee''s option to buy stock at a certain price tends to guarantee that the optionee will make money. It also defeats the usual purpose of granting the option — to give the worker an extra incentive to help the company do better financially.
Apple backdated 6,500 options over a five year period (1997-2002). It later decided to reclassify…
MDL Panel Meets in Miami
By Barry Barnett on
Do Merger Guidelines Matter in Monopolization Cases?
By Barry Barnett on
The head of the DOJ's Antitrust Division, Christine Varney, has done a lot to change the Division's orientation on enforcement of Sherman Act section 2, which makes monopolization and attempts to monopolize unlawful. A big step involved withdrawing the section 2 "report" that the AD issued under Ms. Varney's predecessor. She has also joined with…
“Chinese Wall” Falls; “Information Barrier” Rises
By Barry Barnett on
The Second Circuit today upheld dismissal of securities law complaints against Morgan Stanley for misleading disclosures about a couple of mutual funds. In the course of saying why, the court noted:
Although plaintiffs use the term "Chinese Wall," we use the term "Information Barrier" and intend it to have the same meaning.