This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Laster Scrutinizes Strike Suits in Theragenics Litigation

Stocks in this article: ATVI CVX

Laster directed several questions to the Theragenics shareholder plaintiffs Leslie Baker and Julia Davis. He wanted to know their economic interest in the company at the time the complaint was filed and the date of settlement; "a description of the plaintiff's investment portfolio sufficient to determine the materiality of the plaintiff's economic interest in the issuer;" and "a description of the plaintiff's investment strategy."

Laster also asked a series of questions designed to reveal the relationships between shareholders and their counsel. Laster queried how the plaintiff came to hire Rigrodsky, "including whether counsel advertised for potential plaintiffs; how plaintiff came into contact with counsel; whether plaintiff contacted any other law firms; any referral process among counsel; [and] whether the plaintiff has any other relationships with counsel." He requested a table of "representative actions filed by the plaintiff within the last five years" including the counsel retained, venues in which the matters were filed, outcomes, and any "compensation that the plaintiff received."

Finally, Laster directed a pointed question at Rigrodsky. Counsel for shareholders generally work on a contingency basis, but Laster asked the law firm how many times in the last year it's been hired by the hour "together with an estimate of the percentage of total firm revenues represented by such engagements." Corporate lawyers complain that firms such as Rigrodsky do nothing but file form complaints designed to induce a quick settlement and accompanying fee. Laster wants to know how much of Rigrodsky's business is comprised of those cases.

Corporate lawyers and litigators have asked similar questions - and cynically theorized answers - for many years. They view most M&A-related shareholder litigation as an unwarranted tax on dealmaking. Delaware judges have often agreed with that critique but said they were unable to curb strike suits because of the problem of multijurisdictional litigation. Plaintiffs' lawyers bring M&A-related class action suits in multiple state courts, and defendant companies seek global settlements rather than fight dubious suits because of the cost of defending the matters and the risk of an adverse decision. But many Delaware corporations have in recent years adopted forum selection bylaws or charter provisions that require all fiduciary duty litigation to be brought in Delaware.

There hasn't been much litigation about the legality of such provisions, though then-Delaware Chancellor Leo. E. Strine Jr., blessed one last year. The plaintiffs, shareholders of Chevron (CVX), did not appeal the decision to the Delaware Supreme Court. But Strine is to be sworn in as the chief justice of that body on Friday, and it seems likely that he would steer a similar case to the same conclusion should the issue come before him.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,885.91 +81.11 0.46%
S&P 500 2,071.21 +0.56 0.03%
NASDAQ 4,769.3950 +4.0150 0.08%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs