It's a shake down if the plaintiffs (who in this case are pension funds with big amounts of shares? When I first read the article, where it talked about Rhode Island etc, I assumed it was a state and not their pension fund) are just going to settle for some money in return for shutting up and letting everything continue as normal afterwards?
Why would shareholders sue the company they own shares in if their goal was to get a payout? Surely when the company reports such a payout the share value will reflect that. It seems like this case should be taken at face value, the shareholders want the company to change its behavior so that their shares can be worth more in the future.
If all the shareholders were to sue and divide the payout according to the number of shares they hold then yes, that would be a losing proposition. If only some of the shareholders sue, however, the payout from the suit might exceed the drop in the value of their own shares, at the expense of other shareholders who are not parties to the suit.
