Consider the following not-so-hypothetical scenario. Unicorp is a well-respected publicly traded consumer products company. Without warning, a process server walks into the corporate headquarters of Unicorp and places a summons and complaint into the hands of a member of Unicorp’s management team. Unicorp has been sued!
A lawsuit is nothing new to Unicorp. Legal action is a common occurrence in today’s complex business environment. Yet, this particular instance is a little different. An investigation reveals that the plaintiff is a small, obscure entity previously unknown to Unicorp. In fact, it is not immediately clear what exactly is the plaintiff’s line of business. Although Unicorp firmly believes that the plaintiff is asserting a baseless claim, Unicorp nonetheless has 20 days to make an appearance in court and formally answer the plaintiff’s allegations. Despite that Unicorp sees the lawsuit as baseless, it realizes that mounting a complete and thorough defense will inevitably cost hundreds of thousands, if not millions, of dollars and distract Unicorp from its ongoing business.
