5 ms·
The problem with this saying that "courts side with directors the vast majority of the time" is that it ignores which parties are involved in the lawsuits. In
by nickff 13y ago
The problem with this saying that "courts side with directors the vast majority of the time" is that it ignores which parties are involved in the lawsuits. In most cases, the suit is a class-action brought against the corporation by disgruntled current or former shareholders; employees are not parties to the suit. In this case, the petitioners are seeking restitution which will come out of the pockets of the current shareholders, as the corporation may be forced to pay them, thereby reducing the corporation's assets and total value.[1] If you are interested in this issue, you should read up on "Halliburton v. Erica P. John Fund", which has been argued this Supreme Court term and not yet decided; many interesting arguments are contained in the various briefs.[2]
[1] http://www.forbes.com/sites/realspin/2014/03/04/the-supreme-courts-opportunity-to-end-abusive-securities-class-action-lawsuits/ http://www.forbes.com/sites/realspin/2014/03/04/the-supreme-...
[2] http://www.oyez.org/cases/2010-2019/2013/2013_13_317 http://www.oyez.org/cases/2010-2019/2013/2013_13_317