$3B Petrobras Deal Has Conflicts, Excessive Fees: Objector
Bloomberg Law cited the CEI’s Center for Class Action Fairness objection to an unfair settlement and an excessive attorneys’ fees request in In re Petrobras Securities Litigation.
A $3 billion deal to settle securities fraud claims against Brazil’s state-run oil company Petrobras shouldn’t be finalized, an objector told the federal court overseeing the deal May 10.
A conflict exists between class members who bought Petrobras securities domestically and those who bought them through foreign transactions, objector William Thomas Haynes said.
Foreign purchasers can’t recover under U.S. law, so their inclusion in the settlement class unfairly dilutes the recovery of U.S. purchasers, he said.
The objection and any subsequent appeal could delay payouts to class members for years.
‘Gobsmacking’ Fee Request: Haynes also challenges class counsel’s request of $284.5 million, 9.5 percent of the settlement’s value, in attorneys’ fees. He called the request ‘‘gobsmacking,’’ saying it will further dilute class recovery and ‘‘is based on the brazen overbilling of contract attorneys to the tune of nearly $100 million.’’