On behalf of Jonathan M. Crist, CEI’s Center for Class Action Fairness objected to plaintiff’s renewed motion for attorneys’ fees and expenses in a shareholder suit arising out of Verizon’s acquisition of Vodafone’s interest in Verizon Wireless.
As in the overwhelming majority of strike suits, the settlement in Gordon v. Verizon did not provide any monetary relief to shareholders. Instead, it provided immaterial supplemental disclosures and corporate governance change. For example, among the four disclosures class counsel identified as the “greatest hits” was one that simply put previously provided information into tabular form. In the renewed motion, plaintiff’s attorneys sought $2 million in fees and expenses for their role in recovering this insignificant relief for the shareholder class.
The motion was filed on remand from the Appellate Division: The New York Supreme Court initially denied approval of the settlement. While, on appeal, the Appellate Division found there were minimal settlement benefits sufficient to approve the settlement and remanded for a determination of fees, the Appellate Division did not find that the benefit warranted the excessive $2 million sought by the attorneys and instead noted that fees should be commensurate with the benefit achieved, with minimal benefit resulting in minimal fees.
This objection is in a similar vein as CEI’s victory in Walgreen, as we seek to expand to other jurisdictions the steps taken by the Seventh Circuit and Delaware to limit rent-seeking by plaintiffs’ lawyers in deal litigation.
At a hearing on October 26, 2017, the court awarded a reduced amount of $1.5 million in fees and expenses.
Read more about CEI’s Center for Class Action Fairness here.