There's more than one period because there's six or eight class actions pending. Each has its own time period for class membership and several have been consolidated for judicial efficiency.
Don't let the term "class action" be confused with the classes of shareholders set forth in the reorganization plan. The two "classes" are not the same and any relationship is coincidental.
Regarding the class action suits, there's not much you can do individually other than let the suits wind there way through state and federal court. Right now though, you should read the proposed plan and the statements of management and the unsecured creditors committee. The committee represents all shareholders who filed a proof of claim last fall. Assuming you filed a proof of claim, you have until 30 March to vote your shares.
Do you want 6% of the new class of shares? Or do you think the plan should be scrapped and the company disolved/assets liquidated? That's what we're to vote on.
Management points out that the financial interests of the secured creditors considerably outweigh all the assets of the company. As you probably know, under the law shareholders are last in line (lowest priority for payment) and, in this case, the secured creditors cannot be paid in full. It's therefore almost certain that shareholders will get nothing upon disolution and sale, according to management.
The unsecured creditors committee says, in response, that maybe there are some claims we could make that would get us something, either upon disolution or otherwise. The committee can't say what amount of money there might be, in part because management continues to release potentially liable parties from liability. Generally, a release of this nature means the Directors and Officers can't be held civilly liable and won't have to pay us anything. Of course this stinks, but my main beef with this is that, undoubtedly, those individuals had D&O insurance (purchased for them by us, the FPA shareholders). I can't tell from the disclosure provided by the parties whether there is insurance, or in what amount, or whether any claims have been made/paid by the D&O insurors. All I can tell is that management, as part of on-going operations and as part of the reorg plan, is releasing these folks from any possible liability arising from their actions/negligence/ breach of fiduciary duty.
If you're part of a derivitive class action against these individuals, your rights are, or shortly will be, gone. As I read the committee's comments, management has plans to release, or already has released, these individuals. Regardless of whether the reorg plan is approved or not, it's management's plan to ensure the Directors and Officers don't have to pay us anything. The difficulty with this is that, at the time they were supposedly under a fiduciary duty to the shareholders, these individuals were talking up the stock and selling their shares for between $17-$24.
The reorg plan indicates that, at the same time of these sales, management had a clear understanding that FPA's financial condition was deteriorating. Some people think this practice is illegal. If they acted illegally, the Directors and Officers should not be released from civil liability. I would view the proceeds from their FPAM sales as ill-gotten gains that should be refunded to us, the buyers. That won't happen if they are released from civil liability for their conduct, however, according to the unsecured creditors committee, these releases are going to be granted whether or not we approve the plan. Therefore, I guess I will vote for the plan even though some aspects of it indicate a considerable amount of self-dealing on the part of management and the Directors. I hope the SEC is still planning criminal prosecutions or other enforcement actions. I did my due diligence before buying FPAM but I didn't have the information that management now says (in the reorg plan) it knew all along. Instead, from everything management was saying publicly, it looked like FPA's financial health was solid.
r/s
Ben |
