SOME ANSWERS FROM A LAW FIRM RE: INSP LAWSUIT
I did get in contact with one of the law firms that initiated the class action lawsuit against INSP, and its CEO. Two firms apparently "jointly-filed" the case together...which they first announced on 6/19/2001, in separate Press Releases.
siliconinvestor.com
siliconinvestor.com
One of the law firms is Hagens Berman, based in Seattle, WA, and the other co-filer working with them is Milberg Weiss (which also has a Seattle office). At this time they are also currently working with several other law firms. When I asked why they felt they needed more law firms working with them, the answer was something like, "More bodies, more brains, more plaintiffs."
I'm sure many of you may already know the answers to the questions I asked the law firm...but this being the first time I've ever owned a stock involved in such a lawsuit, I wanted to get some answers for myself...directly "from the horse's mouth," so to speak. <g> BTW, I asked the person I talked to if they had read the transcript of Naveen Jain's last interview on CNBC. The representative said, "No, I haven't seen it. Where can I find it?"...so I suggested they peruse the "InfoSpace (INSP): Where GNET went!" thread on Silicon Investor. <g>
I also commented that many people feel this "class action" lawsuit business is nothing but a legal big scam, where the lawyers often make an incredible financial killing, and the shareholders end up losing even more than they already have, in the end. The representative laughed heartily, and responded with something like, "Yes, some people feel that way, but we like to think that we are providing a valuable service which will benefit the shareholders in the long run, by bringing and winning this type of case."
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Here's a brief <g> synopsis from some of my notes taken during two long phone conversations with a representative of one of the law firms who co-filed the first "class action" lawsuit against INSP on 6/19/01. If I misconstrued anything that was told to me, or if I am incorrect in anything below...the person with whom I talked knows how to contact me for any additions, deletions, and/or corrections. <g>:
DO ELIGIBLE SHAREHOLDERS HAVE TO DO ANYTHING?
No, absolutely nothing. All shareholders who purchased (or "acquired") INSP stock during the "Class Period" (January 26, 2000 through January 30, 2001) are eligible to receive any potential awards from the lawsuit, and are not required to do anything at this time.
ANY ADVANTAGE TO BEING NAMED "LEAD PLAINTIFF"?
No, not really. There is no financial benefit to being named the "lead plaintiff" in a shareholders "class action" lawsuit anymore, as the U.S. Congress passed a law in recent years eliminating any single shareholder's rights and awards being treated differently than all the members of the shareholder "class."
WHY WOULD ANYONE WANT TO BE A "LEAD PLAINTIFF."?
Some "plaintiff" (shareholder and/or group of shareholders) must come forward in order for any law firm to file a "class action" lawsuit. Nowadays the only real advantage to being named the "lead plaintiff" is getting to be intimately involved with the attorneys in the detailed planning, development, and presenting of the entire case...from beginning to end. Other than that, it seems that it would really be a royal pain in the a**. "Defendant" depositions, testimony, sleepless nights, etc...etc...
ARE PAST SHAREHOLDERS OF GNET MEMBERS OF THE "CLASS"?
Yes, if their GNET stock was held through the INSP/GNET "merger" on 10/12/2000, even if they later sold it. Any shareholder qualifies as a member of the "Class Period" if they EITHER "purchased" any INSP stock during the time period covered in the lawsuit (1/26/00-1/30/01), or "ACQUIRED" their INSP stock during the "class" period (which includes INSP stock "acquired" from the merger between INSP and GNET). Thus, if a person purchased GNET stock before the merger, and held it until after the merger was approved by shareholders of both companies on 10/12/2001, they are considered to be a member of the "class" in this lawsuit...whether they want to be or not. <g>
HOW MANY SHARES OR SHAREHOLDERS ARE INVOLVED?
No one really knows for sure. At this point the lawyers most likely only have some approximate "guestimates." For example, how could anyone determine those numbers, without seeing all the actual trading records for every single "Buy" and "Sell"...not to mention the shares "acquired" through the merger with GNET. And heck, with all the day-trading these days, it could be an astronomically large number of shares actually "purchased" during the "Class Period."
ANY DIRECT LEGAL FEES OR COSTS TO SHAREHOLDERS?
No. The attorneys who will be selected by the judge as "lead counsel" for the plaintiff (should the lawsuit proceed), will be working solely on a "contingency" basis for the entire "class," at their own financial risk. If they prevail in the lawsuit (whether by "settlement," or in a full trial), they will undoubtedly be awarded "reasonable" <ggg> attorneys fees...which are negotiated during the "award" phase (usually receiving somewhere in the 20-30% range of the total award). If they don't "prevail," then they are simply out of pocket for all their expenses. Heck, it's a tough risky job, but somebody has to do it. <g>
WHY ARE SO MANY LAW FIRMS FILING THE SAME LAWSUIT?
(about a dozen so far in the first week)
They all want to be named by the presiding judge as the "lead counsel" in a major "class action" lawsuit, or be part of the eventual legal "team." That's where the potentially really big bucks will come for them. The fact that so many are filing for the same case seems obvious. Just think of it in terms of how things work in nature. Study the wolf pack. See how it moves. In this world, there are the "predators" and there are the "prey." The predators' "job" (if you will) is made much easier by locating, singling out, and focusing their efforts on the weaker and slower in the herd, flock, or group...and zeroing in for a much easier "kill." The healthy "prey" animals usually escape, as it takes much more skill and expenditure of energy on the part of the predator to catch them...not to mention it's much "safer," with less potential risk to life, liberty, and the pursuit of happiness for the predator. <g> But of course vultures also come to mind. If you run out of gas in the desert, it doesn't exactly make your day to see a bunch of them circling overhead...just waiting for the opportunity to dine heartily on your dead or dying carcass. But then again, all creatures (even lawyers) have to "eat" something to survive...it's nature's way. And scavengers do serve a useful purpose in this world, cleaning up all the messy, dirty leftover rotting scraps, that the rest of us wouldn't touch...But I digress. :)
HOW DOES THE JUDGE SELECT THE "LEAD PLAINTIFF"?
Each judge (and in each case) can use whatever basis he/she decides, in the selection process. Sometimes they simply select a "major" shareholder filing the lawsuit through a lawsuit-filing law firm as the "lead plaintiff"...and sometimes they select a "group" of very diversified shareholders.
Hearing this, it did dawn on me for a fraction of a second, how ironic it might be if the judge appointed an informal shareholder group that some feel was The World's First Stock Fan Club, the infamous "Go2Netrillionairs"...as the "lead plaintiff." <g> Some might find a certain poetic justice in such an appointment. However, sadly the group's numbers have dwindled to such a pathetic point, that most likely their numbers can now be counted on just a few fingers of a single hand. :(
WHAT IS THE LIKELY SCHEDULE OF EVENTS
1. On August 20, 2000 (60 days after the lawsuit filing), the case will go to the Judge. In the case of the first two law firms who co-filed the case, they will be filing it in the U.S. District Court of Western Washington, to Judge Thomas Zilly.
2. As each law firm who also filed the "class action" lawsuit, each filing will be given a separate case number, and perhaps even a separate judge, in a separate jurisdiction. Both the Defendant and the Plaintiff will most likely submit their legal briefs.
3. Chances are all the lawsuit filings will be "consolidated" before a single judge. The judge who ends up with the consolidated case will appoint a "Lead Plaintiff" (usually within about 30 days from being presented with the case, which would be somewhere around the middle of September, 2001). The plaintiff apparently gets to select their "Lead Counsel," so it undoubtedly will end up being with the law firm with whom they selected to file the case in the first place. Often judges give some preference to their selection of both "Lead Plaintiff" and "Lead Counsel," to "local" law firms with offices based in the general locale of the Court's jurisdiction, and/or "Defendant's" headquarters...but not necessarily.
4. The judge will most likely (but not always) hold a "hearing," and listen to both the Defendant's and the Plaintiff's counsel present arguments.
5. Whether holding a "hearing" or not, the judge will determine either that the "Plaintiff's" attorneys have enough evidence for the case to proceed, or he may dismiss the case outright. If the case is dismissed, the Plaintiff may appeal that decision to a higher court...which in this case would most likely be the Federal 9th Circuit Court of Appeals, based in CA.
6. If the case proceeds, the "discovery" period then begins...and that's when they may call in Levy and any other remaining Go2Netrillionaires for depositions and evidence.
WHAT MIGHT ANY SHAREHOLDER "AWARDS" BE?
In shareholder "class action" lawsuit awards involving securities, the awards are virtually always monetary in nature. Some of you might wish to receive absolutely invaluable INSP wireless "coupons" (such as awarded in the recent Blockbuster Video lawsuit)...but sorry, no such luck. You'll have to settle for actual money if the "plaintiff" wins.
HOW ARE "AWARD" AMOUNTS DETERMINED?
It can vary all over the place. In some cases it is simply a single dollar (or penny <g>) award amount for each single share "purchased" (or acquired through a merger, in this case) by each shareholder during the "class" period covered in the lawsuit. All shares are treated exactly the same, in terms of the award amount per share (no matter for how much it was purchased, or when it was purchased during the "class" period...and/or when or for how much it was sold).
However, some judges, juries, and/or pre-trial settlements can get very creative in the awards for damages to the plaintiff...and often do. For example, it is conceivable that an "award" can be proportioned based on many variables, including the exact date the shares were purchased, and for what amount...as well as when sold, and for what amount. There are "consultants" who are experts hired by both the courts and attorneys for determining complicated formulas for awards like this. In one such case, the shareholders who bought the stock at the later dates of the "class period" were actually awarded the most in the settlement award per share. So, it's conceivable that those purchasers who paid say $138.5/share could receive more per share in any "award" for damages, then those bottom-fishers who picked it up on the cheap at its low, for a somewhere just over a buck and a half per share. Seems fair to me.
HOW ARE SHAREHOLDERS CONTACTED RE: "AWARDS"?
There are specialized large companies called "claims administrators." Working with "transfer agents" they are able to obtain all records regarding every stock transaction. They do a mass mailing to every shareholder who purchased the stock during the "class period." The shareholder is instructed what trading records to attach to the forms provided, in order to determine the "awards" they are eligible to receive.
Well boys and girls...
I bet that's much more than most of you ever wanted to know. I might only suggest that you keep all your trading records in very good order, just in case...as they may someday be worth a small fortune (perhaps even as much as an entire penny or maybe even two pennies per share <ggg>), if this case proceeds, and the "Lead Counsel's" team ends up prevailing.
Roger
PS. My lights are now turned out. |
