The full lawsuit can be found at the following link- http://www.businesswire.com/news/dallas10/20110314006343/en
Warren Buffett’s Berkshire Hathaway is involved in a lawsuit, over Berkshire’s bid for Lubrizol. At first glance, one would think that the lawsuit is a complete joke. But, once you investigate and find that it is actually being brought forth in all seriousness, you have to be just as baffled as I am how this can even be taken seriously. The lawsuit itself comes as a result of the Berkshire Hathaway Inc. buyout proposal for Lubrizol Corporation. The acquisition proposal as an all cash transaction, and while many people wouldn’t even bat an eye at the situation, at least two groups have cried “foul.”
The Briscoe Law Firm, PLLC, and also the securities litigation law firm, Powers Taylor LLP, have both taken a position at this time to investigate reported claims related to the Lubrizol buyout. While the specific buyout has formed terms in which the shareholders will receive $135.00 per share of common stock, the previously listed firms seem to think that it is an unfair amount for one reason for another. The most important and absurd reason that the law firms have mentioned so far is that according to Thompson/First Call, at least one analyst has set a target price for the Lubrizol company to be as high as $148.00 per share of common stock. So, based upon this point (as well as others), the law firms have decided to make a case out of this situation.
In the stated information, Briscoe Law Firm and Powers Taylor, LLP both cite that the board of directors has not acted in the best interest of the shareholders in this specific instance. In fact, they have mentioned that there has been a possible breach of both fiduciary duty as well as violations of state law for the board to act in such a way that is unfair to the shareholders that they are supposed to represent.
Aside from the fact that this case doesn’t seem to hold much merit from the basic lack of specific information, it also becomes even less credible when you look deeper into the article posting. Listed right within the report was some of the previously listed information, but then also included was an (for lack of a better term) advertisement for individuals who own the Lubrizol stock to join the lawsuit. Then, following that small advertisement, there is a small write-up of only about a sentence each listing and advertising the information of the two companies of Briscoe Law Firm and Powers Taylor, LLP.
Despite the idea that this should be taken as a non-story for many, it is simply surprising to see each and every law firm still coming out of seemingly nowhere to try and tap into the resources of others. These two companies who are more or less a step up from chasing ambulances don’t really seem to provide much information on this case at all other than the “estimations” of one analyst.
Now, this writer was very curious to see who this “analyst” is and investigated further. The result of my investigation is even more shocking. I contacted at least five friends who have access to all the sell-side reports, and not one could find this analyst. The analyst is not from Deutsche Bank, Goldman Sachs or any other major firm. In fact, no one could find any sell-side report where an “analyst” recommends the stock to be worth $148.
This causes me to believe that this analyst is some man or woman who calculated that the intrinsic value of Lubrizol is $148. According to my understanding, there is no requirement at all to be an analyst. Joe the Plumber could be the analyst who is mentioned in the lawsuit. This would explain why the original lawsuit does not name this “analyst,” the lawyers are too embarrassed to admit that no reputable (take the word with a grain of salt) analyst/firm has recommended that Lubrizol is worth $148. I have contacted both law firms and left messages requesting more information on the lawsuit. Both firms have not returned my calls.
So, without naming the analyst or showing the calculations or trying to state the terms of how Berkshire and Lubrizol conspired against the shareholders of the Lubrizol corporation, they took it upon themselves to advertise their services and then give people an opt in for a potential lawsuit.
Even if it turns out the analyst is Seth Klarman the lawsuit is still absurd. When you think about this specific case, you also have to think about the basis for the lawsuit. If any analyst was able to come up with a very conservative or even very risky evaluation for any company out there, and then use that projection as the basis for a lawsuit, what kind of market would we be living in? Just because one person thinks that a company could be worth more than someone else, it does not make it a crime. If you want to sell your home for a certain price, and the housing market is depressed, it is not a crime for you to sell at a low price even if it is below what you think the house is worth.
Would these same lawyers have come forward and represented Mr. Buffet and the Berkshire Hathaway company if they had agreed to a deal at $148.00 per share if one analyst had suggested that the price should have been less than that amount? Wouldn’t it be the same situation? If one outlier can force lawsuits and litigation in this market, we are only going to be dealing with more paperwork.
Disclosure: No position in any company mentioned in the article
http://www.valuewalk.com/
Warren Buffett’s Berkshire Hathaway is involved in a lawsuit, over Berkshire’s bid for Lubrizol. At first glance, one would think that the lawsuit is a complete joke. But, once you investigate and find that it is actually being brought forth in all seriousness, you have to be just as baffled as I am how this can even be taken seriously. The lawsuit itself comes as a result of the Berkshire Hathaway Inc. buyout proposal for Lubrizol Corporation. The acquisition proposal as an all cash transaction, and while many people wouldn’t even bat an eye at the situation, at least two groups have cried “foul.”
The Briscoe Law Firm, PLLC, and also the securities litigation law firm, Powers Taylor LLP, have both taken a position at this time to investigate reported claims related to the Lubrizol buyout. While the specific buyout has formed terms in which the shareholders will receive $135.00 per share of common stock, the previously listed firms seem to think that it is an unfair amount for one reason for another. The most important and absurd reason that the law firms have mentioned so far is that according to Thompson/First Call, at least one analyst has set a target price for the Lubrizol company to be as high as $148.00 per share of common stock. So, based upon this point (as well as others), the law firms have decided to make a case out of this situation.
In the stated information, Briscoe Law Firm and Powers Taylor, LLP both cite that the board of directors has not acted in the best interest of the shareholders in this specific instance. In fact, they have mentioned that there has been a possible breach of both fiduciary duty as well as violations of state law for the board to act in such a way that is unfair to the shareholders that they are supposed to represent.
Aside from the fact that this case doesn’t seem to hold much merit from the basic lack of specific information, it also becomes even less credible when you look deeper into the article posting. Listed right within the report was some of the previously listed information, but then also included was an (for lack of a better term) advertisement for individuals who own the Lubrizol stock to join the lawsuit. Then, following that small advertisement, there is a small write-up of only about a sentence each listing and advertising the information of the two companies of Briscoe Law Firm and Powers Taylor, LLP.
Despite the idea that this should be taken as a non-story for many, it is simply surprising to see each and every law firm still coming out of seemingly nowhere to try and tap into the resources of others. These two companies who are more or less a step up from chasing ambulances don’t really seem to provide much information on this case at all other than the “estimations” of one analyst.
Now, this writer was very curious to see who this “analyst” is and investigated further. The result of my investigation is even more shocking. I contacted at least five friends who have access to all the sell-side reports, and not one could find this analyst. The analyst is not from Deutsche Bank, Goldman Sachs or any other major firm. In fact, no one could find any sell-side report where an “analyst” recommends the stock to be worth $148.
This causes me to believe that this analyst is some man or woman who calculated that the intrinsic value of Lubrizol is $148. According to my understanding, there is no requirement at all to be an analyst. Joe the Plumber could be the analyst who is mentioned in the lawsuit. This would explain why the original lawsuit does not name this “analyst,” the lawyers are too embarrassed to admit that no reputable (take the word with a grain of salt) analyst/firm has recommended that Lubrizol is worth $148. I have contacted both law firms and left messages requesting more information on the lawsuit. Both firms have not returned my calls.
So, without naming the analyst or showing the calculations or trying to state the terms of how Berkshire and Lubrizol conspired against the shareholders of the Lubrizol corporation, they took it upon themselves to advertise their services and then give people an opt in for a potential lawsuit.
Even if it turns out the analyst is Seth Klarman the lawsuit is still absurd. When you think about this specific case, you also have to think about the basis for the lawsuit. If any analyst was able to come up with a very conservative or even very risky evaluation for any company out there, and then use that projection as the basis for a lawsuit, what kind of market would we be living in? Just because one person thinks that a company could be worth more than someone else, it does not make it a crime. If you want to sell your home for a certain price, and the housing market is depressed, it is not a crime for you to sell at a low price even if it is below what you think the house is worth.
Would these same lawyers have come forward and represented Mr. Buffet and the Berkshire Hathaway company if they had agreed to a deal at $148.00 per share if one analyst had suggested that the price should have been less than that amount? Wouldn’t it be the same situation? If one outlier can force lawsuits and litigation in this market, we are only going to be dealing with more paperwork.
Disclosure: No position in any company mentioned in the article
http://www.valuewalk.com/
