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Neither side’s counsel returned calls to discuss it, but the person familiar with the settlement said it gave both plaintiffs $1,000, with $40,000 to their lawyers. That’s a pittance as such things go, and almost certainly made suing FSI a money-loser.
What FSI and Tokyo Electron spent defending themselves isn’t known, but $500,000 seems like a reasonable guess. That’s a lot, but it’s about what Rochester Medical agreed to pay in its tentative settlement.
“You can’t entirely inoculate yourself from these post-deal lawsuits, which seem to be the American way,” said Peter Lombard, an investment banker and leader of Piper Jaffray & Co.’s merger and acquisition practice for technology, telecommunications and media companies.
But directors can, he said, reduce the risk of a genuine claim. One idea is to routinely review what their company may fetch in a sale and who likely buyers may be. That makes them better prepared if a deal opportunity does arise.
Lombard also would like to see, in the courts or by legislation, a higher threshold before a legal claim can be made.
“Maybe the first order of business is to get the name of the company right” in a complaint, Lombard said. “I’ve seen it where the name of the target is wrong.”
That would seem to be a reasonable place to start.
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