rruff
Having just gone through the Bankruptcy CH11 for SGI as a stockholder I am acutely aware of the discrepancies in Corporate responsibility to shareholders.
If I recall, class actions came into existence because stockholders were in the current vernacular "fed up" with corporations who used fraudulent means to hurt shareholders and with bankruptcy to reorganize and eliminate the corporate shareholders.
When I first started in the market, there was corporate responsibility. Companies went into business to be successful--------bankruptcy was unheard of--------now companies go into business knowing they can declare bankruptcy and start all over again with all of the same glowing promises.
While class actions are not generally beneficial to stockholders-------------then what recourse do shareholders have who have been deceived either by the company they invested in or other parties who manipulate the stock and stock offerings?
In ref to Milberg-----------
"According to the indictment, the firm received more than $200 million in attorneys’ fees, and paid more than $11 million to just three clients. The firm denies the charges, claiming the kickbacks were simply “referral fees” paid to other lawyers. Business as usual?"
In reference to Milberg Weiss ---Popeo used the term "Business as usual?"
Ironically, this is exactly what SGI's appointed CEO said after he took over that it will be "Business as usual".
Interestingly, Milberg's company successfully represented SGI Stockholders in alleging stock manipulation by SGI Corporate in either the late 1990's or early 2000's. I am glad that those shareholders were able to have some redress.
Now, let's go to the referral fee-----------referral fees are common in business practice---------whether they are appropriate is another question.
Looking at the SGI case---------this is what I saw--------
Creditors filed claims against SGI and entered these as a docket item; SGI as the Debtor, through their lawyer, then objected: the next step was either a hearing before the Judge or a meeting with the Creditor(usually a company) and agreeing on a "cure"; then, back to the Judge via the lawyers and the two companies to report on their agreement. The Judge approves the "cure" .
This is simply a nother form of "kickback" but done under the legal auspices of the courts imo.
SGI gave SGI stockholders no such cure-----they are declared "impaired".
As a stockholder in SGI, or any company, I believe in stockholder rights and participation.
Finally, I am getting there-------------if class actions are not the proper vehicle for helping stockholders and other investors who have been agrieved then what should it be.
In part, I would answer this by saying there needs to be a realignment in the recognition of stockholders as partial and equal owners of the corporate body-----------this may even take legislation to assure that stockholders are recognized and have rights.
All for now--------
mj |
