October 15, 2004

Law Firm Sued Over Ex-Associate’s Golden Parachute

The New York Law Journal reported yesterday that a public company has filed a breach of fiduciary duty suit against a law firm and one of its partners for helping to enrich an associate who jumped from the firm to become general counsel of the company by creating generous golden parachutes (for the associate as well as other company executives).

And the major plaintiff firms are also getting into the executive compensation recovery business – check out this press release from Milberg Weiss about how it recovered $22 million in severance payments from 8 current and former officers at Florida Power & Light.

By the way, the Disney trial has been delayed two days – it now begins on October 20th – the same day as our compensation conference! To glean insight from the former and current Delaware Supreme Court Chief Justices about their thinking on executive compensation and director liability/indemnification – come hear the first panel of that conference. Last chance to register.

Reg FD Strikes the Howard Stern Show

Last week, the big news for loyal Stern listeners (sorry, I am not one) was that he’s going to Sirius radio. As told to me by a member, “it was interesting to hear Stern discussing how he had been walking around with his stomach in knots because he signed the contract a few days earlier – but wasn’t able to tell anyone about it because of “SEC rules.” Love how the SEC was able to do what the FCC couldn’t – keeping Stern quiet.

Sirius filed an 8-K announcing the news – oddly, they filed the 8-K under Item 8.01 (Other Events – which is akin to the former discretionary Item 5) rather than Item 1.01 (Material Agreements) even though they state that their “financial obligations under the agreement are material.” Stern is receiving $500 million over 5 years… maybe I am in the wrong business.