Lawyers that successfully sued to force repayment of some compensation from Tesla directors after alleged overpayment want what amounts to over $US10,000 an hour in legal fees, according to Reuters.
From 2017 to 2020, partners and staff from New York-based law firms Bleichmar Fonti & Auld and Fields Kupka & Shukurov worked over 10,000 hours on a case against 12 directors from Tesla’s board. The lawyers said the directors had been overpaid hundreds of millions of dollars, eventually winning the case. Including what the directors agreed to repay, the total settlement amount came to $US919 million. The money went back to Tesla and its shareholders.
The lawyers are now requesting a Delaware court grant them 25 percent of that settlement which Reuters says works out to $US229 million or around $US10,000 an hour. The lawyers are also seeking an additional $US1 million in expenses.
David Paige, founder of consulting firm Legal Fee Advisors, said that while it’s hard to give an average of legal fees due to these types of “contingency-fee cases,” he thinks they’re asking for way too much.
…he called the Tesla plaintiffs’ request “extraordinary” compared to hourly rates that top out around $US2,000 for star corporate attorneys. Paige said the court will ultimately have to assess the size of the fee against the benefit of the litigation.
According to a court filing, Reuters says that Tesla’s directors are expected to object to the fee request. Still, it would not be the first time such large fees have been agreed to in the past.
Delaware courts have approved higher hourly rates. In 2012, the Delaware Supreme Court affirmed a $US304 million fee in a Southern Copper shareholder lawsuit involving $US2 billion of damages. The fee worked out to $US35,000 an hour, and the defendants opposed it. The state’s high court said judges should examine the outcome achieved, not the hourly rate.
Image: Patrick Pleul (AP)
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