In early November 2007, lead counsel responsible for achieving a $3.2 billion settlement in the Tyco securities class action sought court approval for a $464 million fee award. Three institutional investors that were part of the class objected to the reasonableness of the fee request. In an order issued on December 19, 2007, U.S. District Judge Paul Barbadoro approved lead counsel’s request for legal fees for the entire requested amount, which constituted 14.5 percent of the $3.2 billion Tyco securities class action settlement. In approving the $464 million fee request, Judge Barbadoro cited the length and complexity of the case and the lawyers’ success in winning the largest cash payment from a corporate defendant in the history of securities litigation.
Based on the 488,000 plaintiff lawyer hours reportedly logged on the case, the $464 million fee award works out to an hourly lawyer rate of almost $1, 000 per hour. On a percentage-of-recovery comparison basis, the lead counsel’s fee award in Tyco outweighs the fee award requested in connection with the Enron securities class action. In late November 2007, the lawyers who recovered about $7.2 billion in settlements for Enron shareholders sought approximately $700 million for their efforts, the largest fee request in securities class action history. To date, the Enron court has not ruled on the plaintiff lawyers’ fee request in that case.
For a full copy of the Court’s order in Tyco, please click here.
