“Unique Texas class action law scuttles $0 shareholder derivative settlement”

by Walter Olson on October 1, 2012

“Texas has a unique solution to the problem of coupon settlements: if the lawyers settle for coupons or non-cash relief, they have to be paid in coupons or non-cash relief.” Some scoffed at this as a gimmick, but it seems to have had an effect for the better, most notably in a recent case where the court “prohibited a $1.1 million fee in a $0 settlement over immaterial merger disclosures.” [Ted Frank, Point of Law]

{ 4 comments }

1 David Smith 10.01.12 at 12:59 am

Snicker

The Texans are smarter than any lawyer.

2 Richard Nieporent 10.01.12 at 7:53 am

Don’t sing the praises of Texans too quickly. There is still the infamous Eastern District of Texas that has become a haven for patent infringement lawsuits.

http://en.wikipedia.org/wiki/United_States_District_Court_for_the_Eastern_District_of_Texas

3 Bill Poser 10.01.12 at 11:39 am

What about class action suits in which the remedy desired is not damages but specific performance? Such a resolution can be quite legitimate, but don’t statutes of this type make it impossible for impecunious plaintiffs to pursue such a suit?

4 David Smith 10.01.12 at 5:36 pm

Hey!

I didn’t say Texans were SMART!

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