Why hasn't the Disney litigation settled? Larry Ribstein's answer strikes me as being as plausible as any I've heard:
My point yesterday was that there is severe disagreement here, so the two sides can?t get together. That?s not so much because the case is big ? after all, this is just about a very large pay package, not the collapse of a company which was involved in the Enron and WorldCom settlements. It?s because this case could be a turning point in director litigation ? and it?s hard for the two sides to see around corners.
Insurers also may have more to gain from any judgment than from any settlement at this point. For insurers, it?s very good to get this liability issue settled for the benefit of future cases against directors. Although a plaintiff victory would be bad for insurers, the opinion would at least clarify the situation, and insurers just need to price the risk. A large settlement might signal the potential for liability without clarification, and invite more litigation with uncertain results.
Lesson: clarity of rules is important regarding litigation costs, which are a big part of corporate governance these days. We don't have that clarity right now.
