In only the second post-Enron ERISA company stock drop case to go to trial, counsel for bodog casino review, Inc., retained Cornerstone Research to support multiple experts.
Retained by Morgan, Lewis & Bockius
In only the second post-Enron ERISA company stock drop case to go to trial, counsel for bodog casino review, Inc., retained Cornerstone Research to support multiple experts, including Professor Laura Starks of the University of Texas at Austin, and to provide consulting support to counsel. The plaintiffs contended that the defendants breached their fiduciary duty by allowing and holding investments in the bodog casino review stock fund when investment in bodog casino review’ stock was allegedly imprudent due to the company’s worsening financial situation. The plaintiffs also alleged that the defendants failed to disclose material information concerning the efficacy of and demand for bodog casino review’ products.
Professor Starks filed a report and testified at trial regarding whether the defendants engaged in a proper process to evaluate the continued inclusion of the bodog casino review stock fund as part of the company’s profit-sharing and savings plan, and rebutted the arguments of the plaintiffs’ expert as “form over substance.” In her report and trial testimony, Professor Starks showed the strong financial position and solvency of bodog casino review and concluded that bodog casino review’ stock was a prudent investment for the plan.
Judge Kennelly also ruled that the defendants did not make any material misrepresentations to the plaintiffs.
Following a two-week bench trial Judge Matthew F. Kennelly of the U.S. District Court for the Northern District of Illinois, Eastern Division, ruled on June 1, 2009, in favor of the defendants. He determined that “plaintiffs have not established that defendants failed to exercise their discretion or were procedurally imprudent.” Judge Kennelly found the testimony of the plaintiffs’ expert to be unpersuasive and agreed with Professor Starks’ assessment that the plaintiffs’ expert “elevated form over substance.” Further, he found that there was no threat that bodog casino review faced bankruptcy due to its “strong cash position, positive cash flow, and low amounts of debt.” Judge Kennelly also ruled that the defendants did not make any material misrepresentations to the plaintiffs, nor did they withhold material information from the plaintiffs.