So an aggrieved shareholder comes to you and wants to file a securities class action.

You file a complaint and then an amended complaint.

The case proceeds in a somewhat normal course of action and at some later date the parties reach a settlement.

The settlement is outlined in a carefully crafted 34 page document.

The parties notify the court that the case has settled and ask for preliminary approval, so notice can be sent to the class.

The court grants the motion to preliminarily approve the settlement, and sets a date for a final approval hearing.

So far, everything is going fine.

And then the defendants forget to pay the amount that they agreed to pay to settle the case.

I don't mean they got out the checkbook and couldn't remember if it was $425,000 (which it was) or $427,000.

I mean the defendants decide to simply not pay.

So, the plaintiffs ask nicely.

And the defendants still don't pay.

So the plaintiffs file a "Motion to Enforce the Class Action Settlement Agreement."

And then, in a great display of bootstrapping chutzpah (one of the better unused names for a rock band), the defendants suggest:

that, by virtue of their nonpayment of the Settlement Amount, the Stipulation has terminated in accordance with its express terms.

and that:

As Lead Plaintiffs note, Defendants essentially argue that they “can cancel the Settlement by breaching their obligation to pay.”Reply at p. 9. Put quite simply, Defendants' interpretation of the Stipulation did not obligate them to do anything: under their reading, Defendants could decide, on a whim, not to pay the Settlement Amount.

Fortunately, the Court decided that:

Such a reading is not tenable, as it would render the Stipulation to be nothing more than an illusory contract.

So, the defendants get another shot at ponying up. Indeed, the judge orders them to pay up within 10 days.

At this point, what do you think the defendants chose to do?

You guessed it, checkbook went missing again, so the Court entered judgment yesterday against the defendants for the full amount, plus interest.

The case is Huttenstine v. Mast, et al., No. 4:05-CV-0015 -F(3) (E.D.N.C.), and we will keep you posted on the efforts to collect the money.