Merger Lawsuits Yield Cash for Lawyers, Zero for You

Firms earn big fees even when there is no payout for plaintiffs
Share of 57 lawsuits studied that resulted in fees for lawyers and no payout for clients: 70 percent Illustration by Mitch Blunt

In 2009, Baker Hughes announced it would buy BJ Services, a company that injects gas or liquids into oil wells to increase output. The next day, lawyers for shareholders of BJ Services sued the company, claiming the sale would undervalue their holdings. Ten months later, lawyers on the case met in a Delaware courtroom to seek a judge’s approval for a settlement. The plaintiffs’ lawyers won $500,000 in fees. Their clients didn’t get a cent.

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