Law firm Coughlin Stoia filed a Motion for Preliminary Approval of Derivative Settlement in In Re: McAfee, Inc. Derivative Litigation yesterday. The motion states that “with approximately $30 milion in financial benefits to the Company, this Settlement represents an excellent result. This Settlement is the result of extensive, arm’s-length negotiations between the parties overseen by retired United States District Judge Layn R. Phillps (“Mediator”)….”
The motion states that the $30 million financial benefit to McAfee is based on the freeze and cancellation of approximately 1,729,792 vested, in-the-money options held by certain defendants. The settlement also provides for the payment of $13.75 million to plaintiffs’ counsel.
The motion includes an interesting reference to the recent Apollo Group case:
It is also clear that even a victory at trial is no guarantee that the judgment would ultimately be sustained on appeal or by the trial court. For example, recently in In re Apollo Group, Inc. Sec. Litig., No. CV 04-2147-PHX-JAT, 2008 U.S. Dist. LEXIS 61995 (D. Ariz. Aug. 4, 2008), the court on a motion for judgment as matter of law, overturned a jury verdict of $277 million in favor of shareholders based on insufficient evidence presented at trial to establish loss causation.