Thursday, July 12, 2012
You'll remember back in May we posted about Vice Chancellor Laster's innovation in settlement of a derivative suit. Back then objectors to a settlement appeared. VC Laster challenged them to put up a bond if they really thought the claim was worth more than the settlement. At the time, I really didn't know if the objectors would step up and take over the suit. Afterall, VC Laster made it clear that if the objectors took up the suit and won, they would only receive their pro-rata share of any settlement or judgment. So, the delta between what they think it is worth and the initial settlement would have to be pretty large to induce them to put up a bond. Lo and behold, Reuters is reporting that the objectors put up a bond yesterday:
To the surprise of many lawyers who followed the case, the objectors said in court documents last week they had found the money to keep the case going. They said they would post a $13.25 million bond funded in part by a unit of UK litigation finance firm Burford Capital.
Now, I know from the comments last time that not everyone thinks this kind of innovation in shareholder litigation is a good thing. I get that. But, I think it's worth experimenting. Cause what we've got going now is definitely in need of improvement.