The committee also concluded that the directors had not breached their fiduciary duties.

Pilmer alleged that the directors breached their duty of care and fiduciary duties, in getting a report that was not reasonably accurate.

The suit contends the directors breached their fiduciary duties by adopting a shareholder rights plan and approving severance agreements for some executives.

To show that directors breached their duty of care:

The report also concluded that the officers and directors had breached their fiduciary duties and probably violated some states' securities laws.

They claimed that the directors had breached a duty owed to them as shareholders to inform them of the upcoming demutualisation plan.

They held that although the directors had breached their fiduciary duties, Rock Nominees had not suffered prejudice because the best price had been achieved.

He added that the directors had breached their fiduciary duties, although he said he could not conclude that they had acted in bad faith.

Stern was named in several class action suits in which investors claimed that he and other directors had breached their fiduciary duty to shareholders.

If the directors believe that the former directors blatantly breached their duties, they might feel they have no alternative, lawyers said.