You're right on. I think the most pernicious example of this is in "shareholders' rights" lawsuits. Lawyers organize these class action lawsuits (often of their own initiative) becuase a stock tanks. So if the company if found liable all the shareholders get cut a check from the company, i.e. the money comes out of the shareholders' own equity, i.e. the value they gain from the checks is discounted from the stock price. 'Cept there's one catch - those hefty fees also come out of shareholders' equity.


Think about it. You're a DYN shareholder (no particular reason I picked this example... grrr....). Management engages in questionable activities causing the stock to slide. You take a hit. Then these high-minded lawyers with no connection to the company enter the picture and soak you for legal fees. Oh, but you get a settlement check. Whopee!


Head to law school - it's a money machine!