Class Action Outcome, page-2

That sort of comparative is invalid. Each case turns on it's underlying facts. These actions are not 'shake downs' - ie. file an action in the hope of securing a 'nuisance payment'. Any settlement or judgment will be reflective of underlying liability - and we will not really know that until the sides start exchanging evidence.

In my view, the real question from current shareholders' perspective (and which is unknown) is: how much D+O insurance did the company buy? A$10m verdict or settlement against a $50m limit is "fine" from the company's perspective, but a $50m verdict or settlement against a $10m limit would cost the company and/or the named directors (to the extent they pay) $40m. If there is insufficient D+O cover, 'new' shareholders who bought in after the relevant class(es) will effectively subsidise any payment made by the company to class shareholders above the level of the company's D+O cover. That's the risk you need to evaluate before seeking to buy and hold.

It's also important to know whether the D+O insurance will respond to the claim - ie. has the company done anything that would allow insurers to limit their liability under the policy - but that's also something that we cannot really know at this stage.

Someone made the insightful comment to me on HC a while back that the market is not currently discounting GSW's business to zero with the current 50c share price, rather, it is discounting the cash asset backing. The class actions are one reason for doing that.