Legal settlements "bent as rubber boomerangs"

Those settlements can be as bent as Boy George's rubber boomerang. The plaintiff lawyers collect big-time for their "legal fees", while the "damaged parties" get bugger-all.

About 5 years ago there was a "class-action" suit against the former officers of a NY Utility corporation which owned power plants on Long Island.

The suit alleged that the officers undervalued the corporation when they agreed to a buy-out by a second comporation - and those same officers all "happened" to subsequently be rewarded with plum jobs by the buying corporation.

The suit was on behalf of the holders of the common stock, and was settled for something between $100 and $200 million as I recall - about $5 per share of the common stock.

I was interested because for more than a third of the "period of interest", I had owned 10,000 shares of the stock, so I naively thought that I might get 50 cents to a $1 a share out of it.

My net take from the settlement? Nada - not one God-damned dime. After the shysters took their huge cut (as determined in the settlement agreement, as approved by some hack judge), the scraps that were left went to the big boys - the handful of investment houses that had held 100,000 shares or more, for the entire "period of interest", and they got $1 a share.

The real money went to the shysters. µ Email name, address supplied