Many a good company has been damaged or destroyed by lawsuits, many lawsuits without much merit, think of RIM way back, and that Canadian grave/funeral company, and Artic Glacier, and others ( a very silly one that ICahn talks about ( he didn't do it himself ), good for 3 billion ).

When the damage is inflcted by one group of aggrieved shareholders, who believe that, but for misleading/false information, they would not have bt the stock, or would have sold, those damages are largely thrashed out of the corporation, and thus largely thrashed out of the remaining shareholders, which is both totally absurd and unfair, and can even destroy the corporation, destroying the assets of shareholders and jobs.

Almost regardless of how aggressive the accounting was, the a/r's in particular, i'd have a close to 100 % feeling that PSN would survive, but the lawsuits introduce a area of massive doubt.

And that doubt can continue for years: bringing added doubt to lenders, who hardly need any encouragement; costing what for medium sized companies is substantial sums of money; swallowing vast amounts of executive time and focus; producing endless unhelpful news items, disfavour with analysts, public funds, and most investors.

Thus, in a sense, the lawsuits, whether based on merit or not, are, whether affected for this reason or not, effectively blackmail; pay us off, with enough money and quickly, or....................you know what happens...............whether 'we' ultimately win or not,,,,,,,,,,,,,,,,,,,,,you lose........ big.