Trials & Litigation
Shareholder Suits in Uphill Battle Due to Current Financial Crisis
Posted Sep 29, 2008 3:27 PM CST
By Martha Neil
Despite predictions that the current U.S. economic crisis will bring more business to a number of lawyers, it is also likely to mean more work and less pay for others.
Among those for whom the United States financial situation is creating an uphill battle is plaintiffs lawyers in shareholder suits, according to the National Law Journal.
Plaintiffs securities lawyers face greater challenges than their counterparts in earlier giant shareholder suits such as Enron Corp. and WorldCom Inc., the legal publication says. Reasons why include federal intervention in the affairs of a number of troubled Wall Street behemoths and the widespread nature of the crisis, which allows companies to blame their problems on significant factors other than alleged wrongdoing by those in charge.
The litigation process is also being severely slowed down for many because of the country's financial woes, the legal publication writes:
"This month's bankruptcy of Lehman Brothers Holdings Inc., the $85 billion loan to American International Group Inc. (AIG) and the bailout of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac) have, in some cases, put a temporary freeze on the dozens of shareholder lawsuits filed in recent months against those companies."
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