Posts tagged Attorney Fees

Special Master Reports On Fee Request

Fuhlendorf v. Isilon Systems, Inc., C.A. 5772-VCN (February 8, 2011)

In this report of a well-respected Delaware attorney serving as a special master, there is much to be learned about how to seek advancement of fees.  He does a good job of explaining Duthie v CorSolutions Medical Inc., 2008 WL 4173850 (Del. Ch., Sept. 10, 2008), a leading decision on the administration of advancement claims.  Finally, he comes up with the procedures going forward to avoid all the bickering over fees that so dominates this area.

If you doubt this is a real problem, note that the earnings restatement that gave rise to the underlying litigation involved  $4.8 million.  The attorney fees for just this one defendant approached $7 million.

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Court Of Chancery Again Sets Procedures For Advancement

Fuhlendorf v. Isilon Systems Inc., C.A. 5772-VCN (November 9, 2010)

Once the right to fee advancement has been determined, there remains the potentially vexing question of how to determine if the fees on any given statement are reasonable.  The last thing the Court wants to do is become the monthly fee arbitrator for a case.  Hence, the Court has now several times established the procedures to follow including certification that any question or objection to a request is in good faith, payment of undisputed amounts and the use of special masters to resolve any remaining disputed fee issues.

Now all the Court has to do is get someone to sit between 2 lawyers arguing over fees and to resolve the fees of the special masters.

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Court Of Chancery Awards Large Fees In Intangible Benefit CAse

San Antonio Fire & Police Pension Fund v. Bradbury, C.A. 4446-VCN (October 28, 2010)

For all the occasional griping the plaintiffs' bar does over how it is sometimes treated in the Court of Chancery,  this is a good example that a large fee award may be justly  earned.  The decision is particularly interesting in that the benefit conferred was intangible, a fact that usually has led to smaller awards.  Here the benefit was to enhance or preserve voting rights, a sacred right under Delaware corporate law.

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Court Of Chancery Approves "Bonus" Fee In Indemnification Claim

O'Brien v. IAC/Interactive Corp. , C.A. 3892-VCP (August 27, 2010), affirned, August 11, 2011 (Del. Supr).

This is an interesting decision because, perhaps for the first time, the Court explicitly orders payment of a contingent fee in an indemnification case. The fee in question involved a bonus for success in the underlying arbitration proceedings.  As the Court held, if the fee is due and is reasonable, it should be paid.

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Court Of Chancery Awards Fees For Contempt

Aveta Inc. v. Bengoa, C.A. 3598-VCL (August 13, 2010)

This is an interesting decision for its explanation of the criteria the Court will consider in reviewing a fee application. The Court held that when the fee award is under the terms of a contract, then the primary criteria is to make the applicant whole for the fees it paid. Of course, the fees must still be reasonable.

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Court Of Chancery Reiterates Duty Of Attorneys

Phillips v. Firehouse Gallery LLC, C.A. 3644-VCL (August 9, 2010)

To its credit, the Court of Chancery has recently reminded attorneys of their obligations to cooperate in litigation.  Here it levied a $5,000 fee to be paid personally by a lawyer who failed to carry out that responsibility.

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Court Of Chancery Clarifies Right To Advancement By A Plaintiff

Baker v. Impact Holding Inc., C.A. 5144-VCP (July 30, 2010)

When may a former director obtain advancement of his attorney fees when he files suit?  A series of past decisions held that a counterclaim plaintiff may, in the right circumstances, obtain advancement for prosecuting his counterclaim and other decisions have upheld advancement for a plaintiff under a bylaw or other right that was broadly drafted to require such advancement.

However, when the bylaw or other contractual provision requires advancement for litigation "in defense" of a claim, this decision holds a plainitff may not obtain advancement for bringing suit on his behalf.

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Court Of Chancery Awards Large Fee

Berger v Pubco Corp. ,C.A. 3414-CC (June 23, 2010)

This decision awards 26% of a large recovery to the prevailing attorneys.  If you are successful, then you will be well rewarded,  just as it should be.

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Court Of Chancery Explains How To Apply For Fees

Global Link Logistics Inc. v. Olympus Growth Fund III, L.P., C.A. 4444-VCP ( February 24, 2010)

This decision explains what should be in a fee application to the Court of Chancery. Redacted bills, explanations of what the time was for and why it was spent are all required in a contested matter.

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Court Of Chancery Holds Old Guys Do Not Rule

Concord Steel Inc v. Wilmington Steel Processing Co. Inc., C.A. 3369-VCP (February 5, 2010)

In this decision, the Court modestly reduced an attorney fee award because too much of the legal work was done by a senior partner when a lower cost associate could have been used. While perfectly reasonable, it only shows getting old is not for sissies.

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Court Of Chancery Sets Fee For "Cox Communications" Case

Brinckerhoff v. Texas Eastern Products Pipeline Co. LLC., C.A. 2427-VCL (January 15, 2010)

In the famous Cox Communications case, the Court was critical of attorneys who settle fast after getting a modest and usually expected price increase in a merger and then ask for a big attorneys fee. This decision shows how the newest Vice Chancellor will calculate such fees. He is no pushover either.

Most importantly, the Court explains in detail how it approaches fee requests. The analysis is very fair and the award was ample. This added explanation is very useful in helping to predict future awards and thus facilitate settlements. 

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Supreme Court Upholds Denial Of fees

Alaska Electrical Pension Fund v. Brown, C.A. 240, 2009 (January 14, 2010)

This decision upholds the unremarkable proposition that a class member whose attorneys do not contribute to an increase in merger consideration do not deserve a fee award. The case is interesting because it reflects an unusual clash among plaintiffs' attorneys over who did what to get the price increased and a company's successful defeat of a fee petition.

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Court Of Chancery Permits Limits On Advancement In Bylaws

Xu Hong Bin v. Heckmann Corporation, C.A. 4802-CC ( January 8, 2010)

There is a dilemma over the broad rights to advancement of legal fees given the sometimes very large amounts demanded.  This decision holds that some limits on advancement rights may be placed in the bylaws, even when advancement is provided for in the certificate of incorporation. Note that the bylaw cannot be inconsistent with a certificate provision and must be in place when the director began his term of office for the period when his acts are in question in the underyling litigation.

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Court of Chancery Awards Fees Based on Improved Nonmonetary Terms of Offer

Off v. Ross, C.A. 3468-VCP (December, 10, 2009)

In this unusual decision, the Court of Chancery awarded attorney fees after having previously declined to do so in a November 26, 2008 decision in the same case. The prior decision had been decided because of pending litigation that the Court did not want to affect by a premature approval of a settlement in this case. When that other litigation was settled, it was time to address the settlement here. This illustrates the flexibility of the Court of Chancery in dealing with competing litigation.

The settlement was approved and fees awarded based on the plaintiff’s success in opening up a limited offer to purchase stock to all of the entity's stockholders.

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Court of Chancery Reviews Advancement Law on Counterclaims

Paolino v. Mace Security International Inc., C.A. 4462-VCL (December 8, 2009)

In this decision the Court examines when a corporate officer is entitled to have his fees advanced in defending a counterclaim against him. The opinion does so in the context of a full explanation of the Cochran. line of cases that determine when an employee is entitled to indemnification (when sued for acting in an official capacity) and when he is not (when sued for breaching his employment contract). That is not as easy a distinction as it may seem, and this case helps us understand it

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