RIM’s grim financial problems may save it from its grim legal problems
After Research in Motion announced BlackBerry 10 would be delayed until 2013, some analysts cried death spiral, and CEO Thorsten Heins went into PR overdrive (in under five days, he talked up RIM’s robust future in a Metro Morning interview, an op-ed in the Globe and Mail and a reader Q&A). But the delay could have one other serious consequence: it leaves RIM vulnerable to being sued for misleading shareholders. Heins all but promised a fall 2012 release of the gadget since he took over in January—and, depending when he knew that wouldn’t happen, the company may have broken a regulation requiring companies to promptly disclose developments that could significantly affect their financial state. Basically, saying your business is “laser-focused on coming in on time” will get you burned if you don’t deliver.
Yet, in an ironic twist, RIM’s mega-problems may prove a deterrent for would-be litigants, according to James D. Cox, a law professor at Duke University who was interviewed by the New York Times:
Professor Cox said RIM might be able to avoid shareholder litigation for another reason: the company is in bad shape. Many lawyers, he said, may be unwilling to embark upon such a case because there is no guarantee that RIM would be around when it was resolved.
Also, untangling share price drops caused by the delay in the BlackBerry 10 from the company’s other problems would be difficult, he said.
It’s pretty disheartening to think that investors (who will likely face off against Heins at the company’s annual meeting tomorrow) are so wary of RIM’s future that they might not even deign to sue.