The judge's October 28, 2011, decision confirmed an earlier order upholding most claims. The court held that KSF shareholder client Robert Michael Shenk was not required to first make demand on the Board to bring the lawsuit, and that the majority of the claims were legally adequate as stated. The case alleges that the Sirius Board breached their fiduciary duties by authorizing a merger with XM Radio in the face of easily anticipated liabilities, by misrepresenting its basis and likely effect in terms of competitive pricing, and by placing the company in a desperate need of financing. The court agreed that such claims were viable at this stage: "It cannot have escaped the defendants' notice that, at the exact same time as the FCC investigated Sirius for knowing and repeated misrepresentations, Sirius was once again making repeated statements to the FCC of Sirius' future intentions in connection with the largest corporate event in Sirius' short history."

Further, when it came time to do such financing, the Sirius directors allegedly favored a deal with Liberty Media because it allowed them to continue in office and confer over $100 million in benefits upon CEO Mel Karmazin, and they precluded shareholders from voting on the financing based on a Nasdaq rule premised upon financial stability, just months after receiving a "clean" audit opinion from newly-appointed auditors. Malone, too, allegedly received a $17 million bonus to secure the arrangement.

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