Fox News Blames 'Fee Hungry' Firms for Spike in M&A Class Actions
Taking a break from attacking liberals, Fox Business recently focused its propaganda machine on "fee-hungry law firms" that file M&A class actions against unsuspecting big businesses on behalf of shareholders.
While the profession certainly has its share of overzealous money grubbers, Fox's analysis of the spike in M&A shareholder lawsuits curiously forgets to mention another, perhaps more prominent, cause:
Setting the scene for its argument, Fox points to a recent incident in which, just hours after announcing a $2.8 billion buyout deal, BJ's Wholesale was met with complaints from five law firms accusing the company's board of breaching its fiduciary duties.
The reporter then goes on to say that this is typical of the industry, with law firms then contacting shareholders about a class-action lawsuit, which usually ends in a quick settlement so that a company can finalize the deal.
According to Securities Class Action Services, the instance of these M&A class actions has increased eight-fold since 2008, and most of them are meritless attempts at "easy money."
Again, while this may be true, it fails to pinpoint why and how these lawsuits became so prominent in the world of mergers and acquisitions.
Taking a look at the chart accompanying the article, it appears as though M&A class actions didn't start to take off until 2009, with a slight increase seen in the years 2006 through 2008.
Does this not coincide with the onset of the financial crisis? The very financial crisis that was caused by irresponsible corporate policies? That shed light on exorbitant executive pay that is in many ways tied to those corporate policies?
If these companies had made more responsible decisions to begin with, they wouldn't now be faced with "fee-hungry law firms" and M&A class actions challenging everything they do.
- M&A Class Actions Jump 847% in 2 Years; 'Fee Hungry' Law Firms Blamed (ABA Journal)
- Overpaid Lawyers? 4,300 Govt Attorneys Earn More Than Governors (FindLaw's Greedy Associates)
- Best-Paying BigLaw Jobs to Prosecutors With Most Corporate Scalps? (FindLaw's Greedy Associates)
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