One can't make even a meritless lawsuit go away quickly without paying the
extortion protection money attorney's fees, so the Oracle settlement (Sep. 27; Sep. 20; Sep. 17) will continue to go forward after a California court has approved the modifications, though now Larry Ellison, rather than Oracle shareholders, will pay the requested $22 million in attorneys' fees to go along with Ellison's $100 million charitable donation. The settlement is an improvement over the previous version, because innocent shareholders aren't tagged with paying attorneys in a derivative suit ostensibly on behalf of the corporation. But, given that the purpose of the settlement is to get money to go to charity, and given that Ellison has indicated that his billions will go to charity when he dies, doesn't the settlement actually reduce the total that charity will receive by diverting $22 million to attorneys?
Ellison comes out "ahead": for only $22 million, he avoids millions of dollars of legal expenses and having to spend several weeks in a San Mateo County courtroom and insures against the slim risk that a jury will find him liable for billions in damages. (That the plaintiffs are settling for pennies on the dollar with no benefit to the corporation on whose behalf they're ostensibly suing, as well as the fact that a Delaware court has already absolved Ellison of the same charges, suggests that even the plaintiffs recognize the suit as meritless.) The plaintiffs' attorneys come out ahead with $22 million in free money. Shareholders are cost nothing. But it's hard not to think that society and justice as a whole are worse off by this settlement, not least because it will encourage other bogus lawsuits in the future. (Michael Paige, "Judge OKs Ellison's $122M settlement", MarketWatch, Nov. 22). A third, federal, suit on the same allegations remains pending. (Hat-tip to Lyle Roberts.)