Kevin LaCroix of The D&O Diary writes about the Hamilton Lincoln Law Institute’s essential role in combating nuisance mootness settlements in Akorn:
Ted Frank, an Akorn shareholder, moved to intervene and object to the fee. Judge Durkin ordered the parties to brief the issue whether he had “inherent authority” to abrogate the settlement in light of the Seventh Circuit’s ruling in the Walgreen case (about which refer here).
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Judge Durkin noted that the settlement provided Akorn’s shareholders “nothing of value”; to the contrary the settlement “caused the company in which they hold an interest to lose money.” The settlement “obviously took place in an effort to avoid judicial review.” This, Judge Durkin said, is the merger objection lawsuit “racket” that Judge Posner identified in the Walgreen case, and that Judge Posner said “must end.”
Since the court “failed” to dismiss the plaintiffs’ complaints out of hand, as it “should” have done, the Court “exercises its inherent authority to rectify the injustice that occurred as a result.” Judge Durkin “abrogated” the settlement agreements and order the plaintiff counsel to return the fees paid under the settlement. He ordered the plaintiffs to report to the court by July 8, 2019 that the fees had been returned.