A federal appeals court on Wednesday put the kibosh on a shareholder antitrust suit against the board members of Sears Holding Corp, finding that the suit only served to enrich the plaintiffs’ lawyers.
The ruling from the Chicago-based U.S. Court of Appeals for the 7th Circuit marks the latest victory for Ted Frank, of the Center for Class Action Fairness, who argued that the suit was an abuse of the legal system and conferred no benefit on Sears shareholders at large. The 7th Circuit agreed.
“The only goal of this suit appears to be fees for the plaintiffs’ lawyers,” Judge Frank Easterbrook wrote for a unanimous three-judge panel.
More: Dan Fisher.
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The oral argument, as one would expect from a Posner-Easterbrook panel, is entertaining. What I find particularly amazing is how many lawyers (like the one here) argue in front of Posner and pay no mind to his golden rule, “Don’t rub the judges’ noses in precedent” (because it’s rarely as clear or one-sided as you think it is).
Important Seventh Circuit ruling against shareholder derivative strike suits…
As both Daniel Fisher and the Economist documented recently, the percentage of M&A transactions worth over $500 million that result in shareholder derivative suits has risen from 39% to 96%. [Fisher; Economist; Reuters (quoting me); OL; see also Johnso…