?All About Money?
April 24, 2002
Homestore.com CEO Says Shareholder Lawsuits Likely To Be Settled Eventually
Inman News Features
Homestore.com CEO Mike Long recently predicted a settlement will be reached in the two dozen or so shareholder lawsuits alleging violations of securities law that have been filed against the company and its prior senior executives.
"The good news is that a Federal judge will consolidate all these lawsuits into one lawsuit and there will be one lead plaintiff. Our hope is that it will be a very sophisticated investor. There will be a negotiated settlement. That settlement is a function of what the company can afford to pay. They don?t want to run us out of business because if they drive us out of business, there is no one to pay the claim," Long said at a forum of Realtor association executives organized by the National Association of Realtors and moderated by former NAR President Richard Mendenhall.
The lawsuits aren?t interfering with the company?s day-to-day operations, Long indicated.
"We look forward to the consolidation of the lawsuits so we?ll have somebody to negotiate with so we can go on. It?s managed by an outside law firm. I wish we didn?t have to deal with this, but it is quite manageable," he said.
Long said while Homestore?s situation is his first hands-on encounter with shareholder lawsuits, the terrain is not altogether unfamiliar.
"I don?t claim to be an expert in managing class-action lawsuits because even though I?ve managed public companies for 25 years, this is the first time I?ve been (involved in these types of lawsuits). But I am a student of it because it?s now part of the American business culture," he said.
Shareholder lawsuits have become an almost predictable eventuality for companies that disappoint their investors, Long explained.
"If the stock goes down dramatically, regardless of the reason, (the company) will be sued," he said. "It?s all about money. It?s not about principle."
Copyright: Inman News Service