Duggan was upset. A retired lawyer himself, he knew about “disclosure-only” settlements like this one. Someone would sue a company involved in a merger for failing to provide a piece of information that might be relevant to the merger deal and then settle when the company agreed to disclose it. The plaintiffs wouldn’t get any money—but the lawyers would have their fees paid by the company as part of the agreement. In the Crestwood case, attorneys were paid about $575,000.
Duggan also knew that a well-known federal judge elsewhere had just issued a ruling labeling disclosure-only suits “a racket.” So he wrote a letter complaining about the settlement to the judge in the case. That got the attention of the one man in the country most interested in finding people like Duggan: Ted Frank, professional objector.
‘Enforcement 40’ for 2020
Join Us On LinkedIn
Join the Securities Litigation and Enforcement Group on LinkedIn