Securities class actions are often settled for a fraction of the potential damages. As a result, plaintiffs' counsel can find themselves in the strange position of having to argue against the strength of their own case to justify a proposed settlement.
Although the DaimlerChrysler AG settlement is for $300 million, the Associated Press reports that plaintiffs' counsel worked hard to convince the judge at the settlement hearing that plaintiffs' case had "potentially fatal flaws." The suit alleges that Daimler-Benz AG misrepresented the acquisition of Chrysler as a "merger of equals" to avoid paying Chrysler shareholders a takeover premium for their shares.
Quote of note: "'The biggest problem for us was that the Chrysler division post-merger performance was horrific,' the lawyer said. His comments were meant to convince the judge that the settlement was a nice result for a case that carried considerable risk."Posted by Lyle Roberts at December 8, 2003 7:11 PM | TrackBack