Judge says some top Dell shareholders are plum out of luck in share buyout beef

Dell has successfully whittled away at a lawsuit brought against it by major shareholders who think Michael Dell's 2013 buyout of the firm came with too small a price tag. In a Monday ruling, the Delaware Chancery Court found that five large institutional investors were ineligible to participate in the suit because the way in …

[Mad Chaz]

So investors get bitten because of how much they tried to hide the money/profit from said investment. I say what goes around comes around. They are getting what they deserve.

[Anonymous Coward]

Nope

Nothing sinister here. It's more a result of no one actually holding paper shares any more, and using custodians to hold shares for them (on their behalf).

This is actually really bad for the small guy too who might have had his shares transferred to another custodian while all this was going on and would also be locked out of any chance of settlement, through no fault of their own.

The judge's opinion is spot on - it shouldn't matter that a custodian(s) held the shares on behalf of the investors. Dell got away lucky on this one.

[Angol]

1. Having a custodian hold shares is generally speaking a good thing. UK unit trusts (leftponders: what you call mutual funds, not, as Spock said, unit trusts as you know them) and various other institutional investors are not allowed to hold securities directly; custodian banks hold them on their behalf.

2. There are reasons why an at first sight surprising proportion of large US companies are incorporated in Delaware. These include the state being the US's onshore tax haven and the state's corporate law being exceptionally favourable to company managements rather than their owners (aka shareholders).

[Velv]

Unless they can prove Dell colluded in a criminal manner with other shareholders then they haven't got a leg to stand on. That's investing. Something is worth what two people are prepared to trade it for. So assuming every share received equal return (I.e. no backhanders outside the deal) then the majority decision to sell is the value of the stock. That's the risk you take.

[Pascal Monett]

Something not quite logical here

If you get the dividends on a share, but do not own it, then how is the aggregator legally obliged to give you said dividends ? What legal stance have you to say "those are my dividends" if you are not the owner of the shares that give said dividends ?

Is this all a gentleman's agreement, or what ?

It is quite obvious I am not and never will be a lawyer.