Alfa Buyout, Is it Stealing?

According to an article in the Birmingham News Friday, August 17, 2007, eight shareholders of Alfa Corp. filed a lawsuit opposing the proposed buyout of Alfa by three affiliated companies which own 55 percent of Alfa stock.  The lawsuit was filed in Delaware by attorneys John Somerville, of Galloway & Somerville, LLC in Birmingham, Alabama, and Frank DiPrima, an attorney in New Jersey.  Somerville and DiPrima helped HealthSouth Corp. shareholders recover $31 million from Richard Scrushy.

The shareholders who filed the suit own almost 900,000 shares of Alfa stock, and they believe that the affiliated companies are attempting to steal the company at an unfair price.  Two similar lawsuits have been filed as well.  According to the minority shareholders, the deal is rife with conflicts of interest because most of the directors and officers of the three affiliates are also directors and officers of Alfa Corp.  Consequently, they are sitting on both sides of the deal to the detriment of the minority shareholders.

Is it surprising in this day and age that a large corporation’s shareholders would try to enter into a deal which would favor the officers and directors over the minority shareholders (owners of the company)?  When will the public wake up?  How many corporate scandals do we need to see before we realize why corporations want to take over the court systems and move everything to confidential arbitrations?  Corporations like confidentiality so they don’t have accountability.

Stay tuned to see the end of this one, but my money will be on a large settlement in favor of the minority shareholders because, in the end, that will be the fair deal where both sides profit.

Behind the Chamber of Commerce Curtain

This is an article written by the Alabama Assocation for Justice President, Bob Prince.

 JUSTICE BY ANY OTHER NAME . . . WOULD STILL BE JUSTICE.

For the National Chamber of Commerce to ridicule an organization for improving its name is ironic at best and hypocritical at worst.  As an association, when it’s determined your name only communicates who your members are (trial lawyers) but not what they do (fight for justice), it’s time for a change.  The members of the Alabama Medical Association and the Alabama Education Association fight to improve medicine and education, respectively, in Alabama.  Our members are consumer advocates who fight for justice for all Alabamians, no matter how large or powerful the opposition, and no cute “leopard ad” will ever change that.
 
But back to the chamber’s hypocrisy.  Not too long ago, the Alabama version of the Chamber of Commerce changed its name to The Business Council of Alabama. Ever heard of the goose and gander?
 
More importantly, what comes to mind when you think of the National Chamber of Commerce – not the local chambers of commerce that help small business grow, develop and provide jobs, I mean the National folks?  You know, the one that is kept up by the likes of Karl Rove and Jack Abramoff; the one that is stealthily funded by Allstate and Exxon. Speaking of Exxon, can you believe that the chamber points to that case in its “leopard ad” as an excessive Alabama verdict?
 
Unbelievable! But then again it’s not, if we remember who really pays the chamber to run the ad. Never mind that 2 different juries made up of hard-working, God-fearing, family-values based jurors assessed punitive damages against Exxon for deliberately submitting false information about how much money they owed the state after harvesting one of our natural resources – natural gas, and lots of it – billions of cubic feet in fact. Parenthetically, that’s one way to net almost 40 BILLION dollars annually – lower your inventory cost. Is this a great country or what?
 
Not only did Exxon, a.k.a. Chamber of Commerce-puppeteer-extraordinaire, get caught not paying, they had a contingency plan ready for such an event: appeal to the Alabama Supreme Court. That’s right, our court reversed the case because a letter was admitted into evidence that documented how Exxon knew it might get caught but probably wouldn’t because the “state auditors are not sophisticated” enough to understand what Exxon was doing.  
 
Wow! No wonder the front group for Exxon, you guessed it – the National Chamber of Commerce, runs anti-trial lawyer ads at every opportunity.  The lawyers that tried the case for the state of Alabama had enough experience in court (trial lawyers) and apparently were sophisticated enough (unlike our auditors) to expose Exxon for what it was – a CEO-led corporate cheater that stole from the people of Alabama.
 
So, how do you punish a corporate cheater? You hit ‘em where it hurts, square in the pocket book. Some folks say the more than 3 billion dollar punitive damage award (less than one month’s profit for Exxon) was too low for the oil giant to feel, especially since it makes more than $100 million a day!  So, to some (Exxon backed Chamber of Commerce) the verdict was excessive, and to others (the 24 jurors – hard working, tax paying Alabama citizens) it wasn’t. Leopard ad notwithstanding, you be the judge, just keep in mind who’s really pulling the chamber’s strings.     

Bob Prince
President, Alabama Association for Justice
www.alabamajustice.org

Georgia vs. Alabama

They are similar states located right next to each other, but their laws are so different.  In Alabama, if an individual is killed in an accident, the damages available to the family are strictly punitive.   In other words, the family can only ask a jury to punish the person at fault.  No compensatory damages are available to the family.  So, if a father of two who was 38 years old and earned $60,000.00/year was killed by a person who ran a red light, the family could not ask the jury to compensate them for the present value of his future earnings over his life expectancy (approximately 37 years).  In addition, if he was not killed instantly and spent two or three months in the hospital, the family could not ask a jury to compensate them for his medical expenses or pain and suffering (unless a lawsuit was filed while he was alive).

In Georgia, things are much different.  Not only could the family ask for the father’s future life earnings, but they could also ask for his pain and suffering, the cost of his medical care, and the value of his life.  In addition, if the person at fault deserved punishment, the family could ask for punitive damages as well.

In Alabama, if two people are in a car accident, the insurance company for the person at  fault (assuming they have insurance which is a big assumption in Alabama) usually pays the damages.  However, if the injured party is forced to file suit, that party cannot mention the other party’s insurance carrier.  For example, if John Doe runs his vehicle into Mary Smith’s vehicle and injures Mary Smith, Mary Smith can only file a lawsuit against John Doe, not against his insurance company, say Allstate.  Mary Smith can never tell the jury that John Doe has insurance with Allstate, but John Doe can tell the jury that Mary Smith had BlueCross BlueShield to cover her medical expenses.  So, some juries are left wondering if John Doe has insurance to cover the claim.

What’s Georgia’s answer to this issue?  Georgia has a “direct action” statute.  That statute says that an injured party may file a lawsuit against the party at fault AND his insurance company.  Consequently, in the example above, Mary Smith would file the lawsuit against both John Doe AND Allstate, and the jury is aware that John Doe has automobile insurance coverage.

Which laws make more sense? Alabama’s or Georgia’s?  Shouldn’t a family be able to recovery something to help them with the loss of the father and husband?  Even if it’s just a little bit, it helps the family get back on their feet while they suffer through their grief.  Shouldn’t we be above board with our juries?  Why hide the fact that a party has insurance coverage?  Isn’t that what it’s there for, and shouldn’t the jury be able to know that?  My answer is yes, what’s yours?

Jon E. Lewis, of the law firm Lewis & McAtee, P.C., is a licensed and practicing attorney in Alabama and Georgia.  You can read about these and many other issues at the firm’s many websites.