Friday, February 12, 2016

Lawyers' $304 million fee upheld by Delaware court

Judge: 'Investment banks have hit it big,' now it's lawyers' turn

Lawyers' $304 million fee upheld by Delaware court

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The Delaware Supreme Court has voted 4-1 to approve a $304 million lower-court fee award to Wilmington law firm Prickett, Jones & Elliott and Radnor's Kessler, Topaz, Meltzer & Check for their work in gaining a $2 billion judgement against Grupo Mexico SAB by shareholders of SAB affiliate Southern Copper Co., who felt they'd been ripped off in an SAB acquisition deal.

In the case affirmed this week, Grupo Mexico SAB was found to have directed a company it controlled – Southern Copper Co. – to acquire a third mining company for an over-inflated price, prompting other shareholders of Southern Copper to sue.

Writes the Wilmington News-Journal here: "The 108-page majority [Supreme Court] opinion, written by Justice Randy Holland, concluded that the award to Southern Copper shareholders by Chancellor Leo Strine was correct and reasonable. In her two-page dissent, [Justice Carolyn] Berger agreed with the $2 billion judgment but disagreed on the $304 million in attorneys’ fees...

"At a Dec. 19 hearing in the Southern Copper case, Chancellor [Leo] Strine [who wrote the initial decision] appeared to anticipate the shock about the large fee award, telling defense attorneys that just because it was a group of attorneys reaping a windfall, that did not make the award 'somehow wrong.'

 “I'm sorry, but investment banks have hit it big, a lot bigger [than] the plaintiffs’ lawyer firms have hit it big … And to me, envy is not an appropriate motivation to take into account when you set an attorney fee. It’s not,” said Strine according to a court transcript.

Delaware competes with New York and other states to host major corporate legal disputes. Court tolerance of big fee awards makes the state and its business-friendly laws more attractive to plaintiff lawyers.

Original case was In Re: Southern Peru Copper Corp. Shareholders Derivative Litigation, Delaware Chancery Court, No. 961.

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PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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