{"id":64484,"date":"2023-09-23T05:47:53","date_gmt":"2023-09-23T09:47:53","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/lawyers-who-sued-tesla-board-for-excess-pay-want-10000-an-hour\/"},"modified":"2023-09-23T05:47:56","modified_gmt":"2023-09-23T09:47:56","slug":"lawyers-who-sued-tesla-board-for-excess-pay-want-10000-an-hour","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=64484","title":{"rendered":"Lawyers who sued Tesla board for excess pay want $10,000 an hour"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: The logo of car manufacturer Tesla is seen at a branch office in Bern, Switzerland October 28, 2020. REUTERS\/Arnd Wiegmann\/File Photo<\/span>
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By Tom Hals<\/p>\n

WILMINGTON, Delaware (Reuters) – A legal team that forced Tesla (NASDAQ:)’s directors to agree in July to return more than $700 million in compensation to the automaker for allegedly overpaying themselves are now seeking a huge payday of their own.<\/p>\n

The lawyers want a judge to approve $229 million in fees, or $10,690 an hour, according to a Sept. 8 filing in Delaware’s Court of Chancery. <\/p>\n

The proposed fee award, if approved, would be among the largest ever to result from a shareholder lawsuit filed against a board. The sum would be distributed among lawyers from four firms that spent several years building a case against the compensation paid to Tesla’s directors from 2017 to 2020.<\/p>\n

The legal fee and the settlement must be approved by a Delaware judge at a hearing scheduled for October.<\/p>\n

The 12 director defendants, including James Murdoch and Larry Ellison, agreed to return $735 million in compensation, forego another potential $184 million and overhaul the way the board determines director pay. The money from the settlement will be paid to Tesla and benefits shareholders indirectly, a type of case known as a derivative lawsuit.<\/p>\n

The law firms estimate the total settlement value at $919 million and are seeking 25% of that as fee. They are also seeking about $1 million in expenses. <\/p>\n

Partners and other staff from the law firms of Bleichmar Fonti & Auld and Fields Kupka & Shukurov, both of New York, each billed more than 10,000 hours on the case. McCarter & English attorneys and staff in Wilmington, Delaware and Ronald King, a Lansing, Michigan-based attorney with the Clark Hill firm, also billed hundreds of hours.<\/p>\n

George Bauer of the Bleichmar firm declined to comment and attorneys from the other firms did not immediately respond to a request for comment.<\/p>\n

Courts review fee requests by examining the need to reward risk-taking and effort while preventing a disproportionate windfall that can undermine confidence in the legal system, said David Paige, the founder of Legal Fee Advisors, a consulting firm.<\/p>\n

Paige said it was difficult to compare lawyers’ bills across different types of contingency-fee cases, but he called the Tesla plaintiffs’ request “extraordinary” compared to hourly rates that top out around $2,000 for star corporate attorneys. Paige said the court will ultimately have to assess the size of the fee against the benefit of the litigation.<\/p>\n

The Telsa directors have not objected to the fee request but are expected to do so, according to a court filing by the plaintiffs’ lawyers.<\/p>\n

Attorneys for the directors did not respond to a request for comment.<\/p>\n

Delaware courts have approved higher hourly rates. In 2012, the Delaware Supreme Court affirmed a $304 million fee in a Southern Copper (NYSE:) shareholder lawsuit involving $2 billion of damages. The fee worked out to $35,000 an hour, and the defendants opposed it. The state’s high court said judges should examine the outcome achieved, not the hourly rate.<\/p>\n

The Delaware Court of Chancery judge overseeing the Tesla case, Kathaleen McCormick (NYSE:), has scheduled a hearing on Oct. 13 to approve the settlement and the fee. Tesla shareholders have until Friday to file an objection. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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