A large number of stock-options backdating cases has reachedpreliminary settlements recently, and plaintiffs’ law firms Labaton Sucharowand Coughlin Stoia Geller Rudman & Robbins are serving as lead counsel insome of the top agreements, reports the NationalLaw Journal.
Of the cases brought into public view, few settlements havereached levels that lawyers anticipated at the start of the scandal. In thelast two years alone, more than 120 lawsuits were filed that allege stock-optiongrants were backdated so that executives or other senior officers may benefitfrom higher prices of the shares at an earlier point in time. In the last fewmonths, more than 30 of the lawsuits reached settlements in principle ofpreliminary settlement agreements; some have yet to be announced or have beendeemed confidential, according to the Journal.
New York-based law firm Labaton Sucharow is lead counsel in14 stock-options cases, and has obtained some of the highest-priced settlementsin class actions in the last few months. Last fall, the firm struck a $117.5million deal with Mercury Interactive Corp., which was in turn the largest settlementin backdating class action, according to the Journal.
Meanwhile, San Diego-based Coughlin Stoia has settled 13cases, making up a large share of derivative actions that have been resolvedrecently. Karl Cambronne, a partner at Chestnut & Cambronne, has served aslead counsel in a case against UnitedHealth Group and is touting an agreementfrom December worth more than $900 million.
Defense attorneys, though, argue that few of the cases havebeen settled for large sums. “The options-backdating litigation has not been ahuge bonanza for the plaintiffs’ lawyers,” Edward Fuhr, a partner at Hunton& Williams, told the Journal. “They have obtained some settlements, andthere will be more settlements. But they’re not dramatic settlements, for themost part.”
But the plaintiffs’ lawyers are saying victory is at hand. “Whenyou look at defense costs, the costs to settle derivative suits and securities-fraudsuits, the cost to investigate – the costs are enormous,” Christopher Keller, apartner at Labaton Sucharow, told the Journal.