The lawyers who took on Tesla and Elon Musk were seeking $5.6 billion to win the case. In a lawsuit over excessive pay, ‘That was a bold claim,’ said the judge.



Delaware Court Judge rejected this week Tesla CEO Elon Musk’s attempt to restore his pay package, now valued at $100 billion.

But another denial followed: The lawyers who successfully argued that Musk’s salary was illegal and should be overturned sought $5.6 billion for their efforts. The judge didn’t really bite.

However, they fared slightly better than Musk. Delaware Chancellor Kathaleen McCormick awarded plaintiffs’ lawyers from three law firms $345 million in cash or Tesla stock, down from the $5.6 billion the law firm initially sought for a successful challenge. The three firms include Bernstein Litowitz Berger & Grossman LLP; Andrews & Springer LLC; and Friedman Oster & Tejtel PLLC.

In a statement, Bernstein Litowitz Berger & Grossman said it was satisfied with the verdict and award of attorneys’ fees. “We hope that the chancellor’s well-reasoned decision will bring this matter to an end for Tesla shareholders. However, if defendants choose to further delay the enforcement of this judgment by appealing it, we look forward to the privilege of defending the Court’s thoughtful and well-reasoned opinions on appeal to the Delaware Supreme Court.”

In partially approving the fee request, McCormick wrote that the methodology used by the companies was “correct.” But applying a percentage of the value achieved by reversing the $55.8 billion reparations package results in an “eye-popping number,” McCormick wrote. Tesla’s lawyers were asking for $54.5 million.

“The compensation awarded here must work this way, because $5.6 billion is a windfall regardless of the methodology used to justify it,” she wrote.

In calculating the fees for the plaintiffs’ attorneys, McCormick noted that their time and effort were substantial. Lawyers recorded 19,499.95 hours, conducted an investigation, document discoveryand took 17 statements, among other things. “The plaintiff faced some of the best law firms in the country, who put the plaintiff through their paces,” McCormick wrote. They also faced “enormous unforeseen risk.”

The award represents a 25.3 multiplier for the hours worked by the attorneys, she wrote.

“The standing and ability of plaintiff’s counsel support an award,” McCormick said in her opinion. “They are experienced shareholder advocates who have secured some of the largest recoveries in the court’s history and successfully taken high-stakes cases through trials and appeals.”

How many degrees of separation are you from the world’s most powerful business leaders? Find out who made our brand new list 100 most powerful people in business. Plus, learn about the metrics we used to build.



Source link