A lawsuit filed against a number of former Midway executives over alleged share price skullduggery has been dismissed by a U.S. judge who said their actions were “classic puffery” but not actually illegal.
You thought the whole Midway mess had blown over by now, didn’t you? Think again! The company may have gone bankrupt, spun off or shut down its various ancillary operations and been snapped up on the cheap by Warner, but through it all, one thing has remained: The lawsuits. There’s one less on the pile now, though, thanks to U.S. District Court Judge David Coar, who has ruled that while the actions of Midway executives may have been a bit heavy on the optimism, they didn’t break any laws.
Filed by Joseph Zerger in 2007, the class action suit alleged that Midway executives David Zucker, Thomas Powell, Steven Allison, James Boyle and Miguel Iribarren had conspired to hide the company’s financial difficulties from shareholders, leading them to incur heavy financial losses. But the judge ruled that the five did little more than “than publicly adopt a hopeful posture that its strategic plans would pay off.”
“Such preening for the financial press is classic puffery,” the judge said. “Even if these statements were not puffery, Plaintiffs cannot establish that they were false when made.”
Of course, as we all know by now, Midway’s strategy didn’t pay off, things went from bad to worse and the company eventually collapsed under the crushing weight of its many, many problems. The end of this lawsuit isn’t the end of Midway-related litigational headaches, however; like the proverbial beer bottles on the wall, this is one down and a whole lot more to go.