2 ms·

How does suing a company work? Is it functionally just like a forced dividend, or is it more complicated than that?

• paxys 3y ago
  It's like any other class action lawsuit. Nothing to do with a dividend.
  • xur17 3y ago
    But if it's the stock holders that are suing the company, and they are receiving compensation from the lawsuit based on the size of their holdings, it's a cash payment from the company to the holders, which is exactly what a dividend is.
    • paxys 3y ago
      Not all stock holders will be part of the lawsuit, and some non stock holders (say people who have already sold) can be part of the lawsuit. There can also be people who claim second and third degree damages without actually holding any stock. And there is no rule that compensation has to be in proportion to anyone's holdings. All of this will be up to the court to decide.
• james_in_the_uk 3y ago
  The latter. It is functionally closer to a speculative investment. Litigation is expensive and notoriously uncertain.