Shareholders Sue Novell Board

dgharmon writes "If you thought the deal smelled funny back in 2011 when Novell sold itself to Attachmate and its patents to a Microsoft consortium, you are not alone. Some shareholders sued. Specifically, they claim that Novell favored Attachmate over other bidders, especially a 'Party C', and the judge, under Delaware's reasonable 'conceivability' standard, denied summary judgement with respect to the board and decided there will need to be a trial."

Comments

Will there maybe be some justice?

[Anonymous Coward]

I would hope that sometimes the bad guys don't win. Maybe this time, since the bad guys have no money left to use for a defense, we might see some justice.

Re:Will there maybe be some justice?

[tysonedwards]

Except, typical M&A deals typically provide indemnity protection to allow the acquiring entity to protect their investment within said company. I am sure that Microsoft would be more than happy to throw money into the defense of the former Novell executives to ensure that their patent portfolio is secured.

At which point, all will be right with the world as those wonderful, upstanding members of society that put themselves through law school to protect and serve the under trodden multinational corporations will finally be able to provide for their families.

Re:Will there maybe be some justice?

[jbengt]

The deal has already gone through. Microsoft would not have to give up what it bought. This is a shareholder suit against Novell, not a third party suit to rescind the purchase. If successful, Novell, or possibly (though much less likely) Novell's board/executives, would have to pay shareholders for value not received.

Sweet

[Anonymous Coward]

We need more of Management getting it from the Shareholders.

Re:Sweet

[tnk1]

I don't know if you really want that. Management can be big douchebags, but they're often big douchebags on behalf of the shareholders who want their stock to return money to them.

I know of one company that I have had dealings with that nearly sold itself to a competitor with full knowledge that the competitor would take their customers and lay everyone off shortly after. This was because the shareholders wanted their money back and were tired of waiting, so they wanted the liquidity back, even though the company had finally reached profitability.

Mind you, given how long it took for the company to become profitable, and the lackluster share price, I was not entirely appalled at the action, but shareholders are not your friends, or even the friends of good business practices, necessarily. Much of it depends on the shareholder personally and what their stake in the company is.

Re:Sweet

[nedlohs]

But that's how it should be.

If I run a corner store and decide that I'm not making enough money for it to be worthwhile then selling my corner store for as much as I can even if that buyer is going to sack the employees, knock down the building, and build a car park. That's my choice. Whether wanting to be able to afford to retire makes me an asshole or not is unrelated to the fact that being an jerk should be my choice.

Shareholders in larger company are the same - if they want to exit and get as much money as they can for the business that's their choice.

Re:Sweet

[ArhcAngel]

Which is precisely why I am appalled that banks are allowed to be publicly traded companies. If you use a bank to store your money you are not a customer you are the product.

Re:Sweet

[tnk1]

That is definitely their choice, and their right. However, I'm not entirely convinced that is the best way to do business.

More to the point, although I'm generally not as down on capitalism as my lefty friends, I do recognize that when someone states that we (in the sense of "the public") might want more shareholder suits, that statement should not be made so broadly. Well-run companies that are profitable and management who runs the company for long term stability and profitability have been ousted by shareholders who want to simply pillage customer relationships and fire sale the assets. One tool in use for that is the minority shareholder lawsuit.

Re:Sweet

[gl4ss]

sure they can do that.

however a shareholder has limits on how much it can screw over the other shareholders without it being fraud(depending on what kind of shares and how much one is holding).

Re:Sweet

[interkin3tic]

I don't think saying "should" is appropriate unless you are only considering the situation from an economist's standpoint. From the perspective of "What's good for most people" that's not what you should do.

Anyway, you're ignoring the context of GP's remarks. He wasn't saying "Shareholders should be your friends," he was saying "Shareholders can be evil too" in response to a suggestion that the shareholders are good guys and the management is the bad guy.

Re:Sweet

[nedlohs]

Yes he was. But shareholders are allowed to be evil. If I want to sell my lynchpin of the community business to someone who is going to knock it down and build a garbage dump and destroy the entire community so that I have a few more dollars to retire with, that's my right. The community can try and raise a larger amount of money and out bid the guy or they can try and get zoning laws/etc changed to stop me. But I own it I can sell it if I want to.

Whereas management doing things that the owner doesn't like is not only possible "evil" in terms of the community, but also in terms of the owners.

Re:Sweet

[jaygatsby27]

righty.

Re:Sweet

[interkin3tic]

But I own it I can sell it if I want to.

Great. No one was suggesting otherwise.

Re:Sweet

[nedlohs]

So you agree that shareholder being evil is OK then?

Re:Sweet

[interkin3tic]

Am I okay with people being evil? Or am I okay with people having the right to be evil? No and yes, respectively.

Public record

[Anonymous Coward]

At the very least, some dirt will become public record.

And this will provide a couple of years of stories for Slashdot.

adj. ability to take a full 3 inches of judgement

[VortexCortex]

"...and the judge, under Delaware's reasonable 'conceivability' standard," fucked them real good.

Impregnated with justice, the shareholders expect tiny lawyers to spring from their chests any day now. Such is the life cycle of the North American Tailless Serpent.

Re:Question?

[Pieroxy]

Dude, Google it. They're gone and we don't miss them.

Re:adj. ability to take a full 3 inches of judgeme

[ArsenneLupin]

From their chests? Is that what you call yours?

Re:adj. ability to take a full 3 inches of judgeme

[Anonymous Coward]

From their chests? Is that what you call yours?

Really? Not only have you've never seen Alien, but you don't even know about one of the most memorable scenes in movie history?

Microsoft bends rules of Capitalism yet again

[Anonymous Coward]

Microsoft also managed to "acquire" Nokia without investing a cent. Now they can suck them dry and leave the caracass to rot. This is yet another example that free market rules do not apply to Microsoft. They just take companies over by proxy.

Re:adj. ability to take a full 3 inches of judgeme

[alexander_686]

Choice #1 – give the board wide discretion on its action. Maybe it will take a wild long term risk that pays off big time. Or maybe it will line its own pockets.

Choice #2 – put the board on a tight leash. They will take less risks. They will focus on easily measurable metrics on a quarterly basis. Quivering little rabbits they will become.

Or it’s a false choice – you need to find a happy medium in-between – so please tell me exactly how we should tighten things up on the board?

Re:Question?

[mcgrew]

Oh, for fuck's sake, mods, you can't get any more offtopic than that! MOD DOWN PLEASE. And kurt, your journal is the place for that particular observation, not in a completely unrelated first page story.

I hope the editors notice the moderation and ban whoever thought the GNAA was in any way interesting from ever again getting mod points. I do not come to slashdot to see comments about the GNAA!

What the fuck, people? Is slashdot going the way of K5? STOP THIS NONSENSE!

Novell? Still Exists?

[rueger]

Seriously, I thought they had disappeared along with Pets.com..... any company that could destroy WordPerfect deserves to die.

Re:Nokia

[Abreu]

I expect Nokia's shareholders (and maybe the Finnish government) to sue Elop and friends.

So my pick that "Party C" is Microsoft related?

[Pecisk]

Just a stupid hanch, but Attachmate saved Novell as good Linux oriented company, which still offers solid package of enterprise software, which is mostly crossplatform, but Linux support obviously is one the best.

So I guess someone tried to "get over with" lefovers of Novell, and didn't get it? Or someone made a bet on that and didn't get share price he wanted?

What does the government have to do with it?

[Anonymous Coward]

Last time I checked, the government owned something like 2% share of Nokia.That definitely puts it in the top 50 (probably even top 20) shareholders but aside from that, the government has very little to do with the company.

Honestly

[forkboy]

If you're a shareholder in Novell after 1998 or so, you pretty much deserve whatever comes. Where else do they have their money, Netscape and AOL? Honestly.

Novell & Wordprefect Still Going Strong

[Anonymous Coward]

Seriously, I thought they had disappeared along with Pets.com..... any company that could destroy WordPerfect deserves to die.

I do SMB network support and have many law firm clients.

Novell is still going strong and is used by these firms for Novell Linux based file and directory services as well as GroupWise groupware, presently shipping version 2012

WordPerfect is still going strong and is used by these firms as well. WordPerfect is now owned by Corel, as it has been for over a decade. WordPerfect X6 (version 16) is the presently shipping version.

So, where've you been since 2002?

Re:Novell & Wordprefect Still Going Strong

[rueger]

Pining for 5.1 of course!

Novell's Sale.....

[Anonymous Coward]

as a disclaimer, I use Novell andn NetIQ products at work, I did not own stock in Novell, nor do I have anything to do with the Attachemate Group....

When purchased, Novell has approximately 1 Billion USD in cash, they had been posting a slow but steady growth in people doing implementations of their products and has just launched OES2 SP3, most likely the best version of their NOS since the Netware 4.11 days.

1 BILLION dollars, and a low stock evaluation made the company ripe for picking, Attachemate has broken the company up into 3 discrete divisions

1. Novell - this is the OES products, ZENworks and Groupwise
2. NetIQ, this is the identity/security software including eDirectory, which is the cheapest of the real x500 directory services (the others are Oracle and CA's).
3. SUSE , which is the linux division.

The company has flourished under the new management, sales are up and things are looking good. New products like Vibe (which was Google's wave) and FiLR are wonderful platform agnostic services which will move the company along nicely.

The old stockholders who drove the company to make stupid decision after stupid decision are pissed because now they can't have a piece of the pie when another company went "all in" on a chance filled deal and made it ......

Re:Question?

[kurt555gs]

I do not come to Slashdot to see paid Microsoft shills and Astroturfers expound on how Windows 8 is good, and Microsoft is now a nice company either.

Re:Question?

[mcgrew]

I agree, shills and astroturfers should be modded down as well.