RE: GO-AWAY MONEY
RE: GO-AWAY MONEY
Sent: 7/23/96; 8:40:44 PM
From: Bill.Humphries@msn.fullfeed.com (Bill Humphries)
A few thoughts.
> Anyone who cares about technology should read the articles. Anyone > who owns stock in any company with a presence in California. Any > journalist that covers business or cares about jobs.
I read the articles, and yes, Lerach (in my opinion) acts opportunisticaly.
However, the websites haven't prompted me to vote for the propositions -- YET -- because they haven't provided the level of answers I need to make a decision. I'm also leery of lawyer bashing since, after all, my ACLU dues went towards the salaries of the people who argued against the CDA.
Most of what follows is based on my reading of the legalreform.org site.
I still don't know how pervasive the problem of shareholder strike suits is. From the sites I know that it has happened to a number of Silicon Valley firms, but I don't have a feel yet for what this costs the regional economy, the national economy and world economy. The authors relate some spectacular stats, but I don't know what that is in relation to the size of the firm, I can't distinguish this between a flea bite or a flock of vampires.
There are two things needed here: a measure of the dollar cost of these suits in relation to the revenues of the affected firms. Historical information on the number of filings (that data's from the Administrative Office of the Federal Courts for federal filings and I'm not sure who collects the data in California since I just moved here from Madison.) Unfortunately the Administrative Office doesn't serve that data over the Web. (It's available, I used it in grad school, I'll ask a friend back in Madison about running an extract over shareholder derivative suits.)
In the middle of the arguement over federal tort reform, the team I was helping to support at the UW Law School produced a telling graphic. Over time, the number of product-liablity torts was falling steadly over the 1980's. The reformers need an unambigous fact such as that to demonstrate the point. I discount individual horror stories because I don't know if they are representative of the population of suits. Remember that the plural of anecdote is data.
What are the alternatives? The only solution provided is "British-Rule" loser-pays. Are there other ways to prevent or discourage the problem? I'm being asked to vote on an important policy issue, I'd like more than one choice and IMO loser-pays sounds draconian. Your site could be a clearinghouse for people who want to know the alternatives.
Finally I'd like to read the propositions themselves. I couldn't find the text of the propositions on the legalreform.org server.
There's merit to your position, but I need more information.
> It's a revolutionary proposition, designed to establish a new high > growth branch of the legal profession -- lawyers who wait for a > stock's price to dive, then attack, and get their go-away money.
This is a problem which has been around for a long time. The troubles engendered by the separation of ownnership and control in the modern corporation have been hashed about since Berle and Means first wrote about them in the 1920's. At the risk of upsetting the venture capitalist classes, maybe the equity based firm isn't the best way to organize R&D intensive companies.
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