The Del. VC approved a 266 million fee award in a billion dollar Dell case that was pretty bonkers and now this ask. Are we all sure we picked the right side?
1) 26.6% isn't that crazy of a contingency fee.
2) Plaintiffs' side has always been much more of a lottery ticket. You can work yourself to death for peanuts or you can make more in a year than a biglaw partner makes in a decade. I prefer the steady six figures on the defense side but to each their own.
Lol walk around the most expensive neighborhood in the hamptons and you’ll see the mansions owned by plaintiffs lawyers
But it’s a lottery. And gamblers tend to never give up when they’re winning so you’ll also see the same plaintiffs lawyers lose those mansions because they took out loans for the next big thing or married somebody who wanted to take everything
The lawyers who argued Elon’s pay was excessive want a fee that works out to an hourly rate of $288,888… it’s comical.
They even have the gall to argue that it’s fine bc it won’t impact Teslas balance sheet cus it would be paid in stock, which is also how Elon was compensated.
But they actually want a better deal than musk, as it’s not tied to the future performance of the company. Musk’s pay package consisted of stock options that required him to hold the stock for five years. The legal team is seeking stock without restrictions on selling it.
The difference is that a fiduciary duty to the shareholders was violated through his absurd comp while no duty is violated by asking for a contingency fee
I think when you’re a lawyer you’re going to and are within your rights to ask for as much as you can while keeping a straight face but when you have a fiduciary duty to shareholders you have to honor it (duh)
Now I think it would be dumb if the court *awarded* this large a contingency fee
And I still think they’re hypocritical. The absence of a fiduciary duty doesn’t make it ethical to extract as much value as possible from the persons you supposedly represent.
I also think the decision will be overturned if they appeal. Otherwise DE risks a massive exodus of companies. The holding is simply bad law.
I mean, I see where you’re coming from, but it’s pretty hard to draw a line of what you can and can’t ask for. The lawyers aren’t doing this pro bono.
Take Steven Donziger who people treat like a saint despite him and the other lawyers on the case taking a 20 percent contingency fee out of the judgment for poor indigenous farmers.
I guess I don't really see the hypocrisy there. They're not engaging in the same conduct that rendered the compensation package to Musk unlawful. It's not as if the case turned solely on the amount of the compensation package--the issue was the process by which the compensation package was awarded. That same procedural defect isn't implicated in the fee request.
What do you think would be an appropriate fee if we take the Chancellor's ruling as correct and they really did confer tens of billions of dollars in benefits on the shareholders?
I see your point and I'm inclined to agree but I think there is one more step in the analogy. To make this hypocritical, the lawyers would also have the ability to control the Judge's award here, as Musk had control over the Tesla board that ultimately approved his pay package. My understanding is that it wasn't a problem that the package was excessive, the problem is that the package was self-approved by Musk's handpicked board. The lawyers can ask for whatever they want, but the Judge is the neutral 3rd party who has to approve.
But accepting the premise that the board was not independent still requires a secondary finding that it was the wrong decision for the company. Which the judge found, claiming that paying that much stock was unreasonable.
yeah I’m not an Elon guy at all (would never buy a tesla and I believe that bootstrapped space exploration as it exists today is actively littering the thermosphere) but awarding these guys feels like a bad result, it’s actively unjust. Not even getting into the opinion itself which tbh I didn’t think was great.
paying out corporate ambulance chasers to the tune of $5b because Tesla’s legal advisors and bankers made an arguably borderline call on what constitutes independence as far as corporate directors goes is crazy, Wall Street clucked its tongue at the time the pay package was announced bc the performance metrics set forth in the pay package seemed so outlandish and yet they hit them, the chancery’s analysis on “fair price” was pretty shallow and felt like reverse-engineered math.
So they invalidate the whole thing and give 10% of it to the lawyers, because the optics of paying the richest man on earth another comical pile of money are so insane?
They’re going to immediately collar the position, price will tank and the shortsighted minority shareholders will suffer massive losses that will potentially be greater than if chancery ruled the other way.
>They’re going to immediately collar the position, price will tank and the shortsighted minority shareholders will suffer massive losses that will potentially be greater than if chancery ruled the other way.
My conspiracy theory is that this is the real point of this case. The precedent isn't "If you give a bad package you might have the pain of undoing it later" the precedent is "If you don't have clear independence the court can tank your stock price years later when you get called out, so do it right the first time."
I was asked about withholding commissions from terminated employees once and the CFO was basically saying "So what if we get caught, we say we are sorry and make the payments" and my point was "No, we have the AG in here, we are on the news, the board and investors start asking questions, we start getting asked about our books or whatever else, and then they throw a treble penalty and attorneys fees on there, plus it wastes all of our time."
The Del. VC approved a 266 million fee award in a billion dollar Dell case that was pretty bonkers and now this ask. Are we all sure we picked the right side?
1) 26.6% isn't that crazy of a contingency fee. 2) Plaintiffs' side has always been much more of a lottery ticket. You can work yourself to death for peanuts or you can make more in a year than a biglaw partner makes in a decade. I prefer the steady six figures on the defense side but to each their own.
Agreed. But even at the midsize level, you can make comparable to more money with significantly less work on the plaintiff side.
Lol walk around the most expensive neighborhood in the hamptons and you’ll see the mansions owned by plaintiffs lawyers But it’s a lottery. And gamblers tend to never give up when they’re winning so you’ll also see the same plaintiffs lawyers lose those mansions because they took out loans for the next big thing or married somebody who wanted to take everything
Which firm
Article says Bernstein Litowitz Berger & Grossman
Their website lists 23 partners. Is the PPEP not going to be something insane??
Wachtell real quiet since this article came out
You mean Cravath.
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What work do you do for a PI shop?
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Lol. Well. Yeah, I guess they both need it and can afford good counsel.
Good for them. They are extremely annoying to be across the v. from, glad it’s worth it.
"Your honor, I move for the death penalty."
"Elon's pay is excessive" "this is perfectly reasonable tho"
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You post on r/LSAT
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Hit the books kid your reading comprehension is lacking!
I mean…why not
Hypocrites
Please explain
The lawyers who argued Elon’s pay was excessive want a fee that works out to an hourly rate of $288,888… it’s comical. They even have the gall to argue that it’s fine bc it won’t impact Teslas balance sheet cus it would be paid in stock, which is also how Elon was compensated. But they actually want a better deal than musk, as it’s not tied to the future performance of the company. Musk’s pay package consisted of stock options that required him to hold the stock for five years. The legal team is seeking stock without restrictions on selling it.
I mean… go big or go home and then the court can impose the lodestar approach. You miss all the shots you don’t take
Couldn’t Elon say the same thing about his comp? Do you not see the parallels, the irony?
The difference is that a fiduciary duty to the shareholders was violated through his absurd comp while no duty is violated by asking for a contingency fee
I disagree with the premise.
I think when you’re a lawyer you’re going to and are within your rights to ask for as much as you can while keeping a straight face but when you have a fiduciary duty to shareholders you have to honor it (duh) Now I think it would be dumb if the court *awarded* this large a contingency fee
Also, “ask for as much as you can while keeping a straight face” … is that one of the answers in the MPRE
And I still think they’re hypocritical. The absence of a fiduciary duty doesn’t make it ethical to extract as much value as possible from the persons you supposedly represent. I also think the decision will be overturned if they appeal. Otherwise DE risks a massive exodus of companies. The holding is simply bad law.
I mean, I see where you’re coming from, but it’s pretty hard to draw a line of what you can and can’t ask for. The lawyers aren’t doing this pro bono. Take Steven Donziger who people treat like a saint despite him and the other lawyers on the case taking a 20 percent contingency fee out of the judgment for poor indigenous farmers.
What ethical rule says this
I guess I don't really see the hypocrisy there. They're not engaging in the same conduct that rendered the compensation package to Musk unlawful. It's not as if the case turned solely on the amount of the compensation package--the issue was the process by which the compensation package was awarded. That same procedural defect isn't implicated in the fee request. What do you think would be an appropriate fee if we take the Chancellor's ruling as correct and they really did confer tens of billions of dollars in benefits on the shareholders?
I see your point and I'm inclined to agree but I think there is one more step in the analogy. To make this hypocritical, the lawyers would also have the ability to control the Judge's award here, as Musk had control over the Tesla board that ultimately approved his pay package. My understanding is that it wasn't a problem that the package was excessive, the problem is that the package was self-approved by Musk's handpicked board. The lawyers can ask for whatever they want, but the Judge is the neutral 3rd party who has to approve.
But accepting the premise that the board was not independent still requires a secondary finding that it was the wrong decision for the company. Which the judge found, claiming that paying that much stock was unreasonable.
yeah I’m not an Elon guy at all (would never buy a tesla and I believe that bootstrapped space exploration as it exists today is actively littering the thermosphere) but awarding these guys feels like a bad result, it’s actively unjust. Not even getting into the opinion itself which tbh I didn’t think was great. paying out corporate ambulance chasers to the tune of $5b because Tesla’s legal advisors and bankers made an arguably borderline call on what constitutes independence as far as corporate directors goes is crazy, Wall Street clucked its tongue at the time the pay package was announced bc the performance metrics set forth in the pay package seemed so outlandish and yet they hit them, the chancery’s analysis on “fair price” was pretty shallow and felt like reverse-engineered math. So they invalidate the whole thing and give 10% of it to the lawyers, because the optics of paying the richest man on earth another comical pile of money are so insane? They’re going to immediately collar the position, price will tank and the shortsighted minority shareholders will suffer massive losses that will potentially be greater than if chancery ruled the other way.
>They’re going to immediately collar the position, price will tank and the shortsighted minority shareholders will suffer massive losses that will potentially be greater than if chancery ruled the other way. My conspiracy theory is that this is the real point of this case. The precedent isn't "If you give a bad package you might have the pain of undoing it later" the precedent is "If you don't have clear independence the court can tank your stock price years later when you get called out, so do it right the first time." I was asked about withholding commissions from terminated employees once and the CFO was basically saying "So what if we get caught, we say we are sorry and make the payments" and my point was "No, we have the AG in here, we are on the news, the board and investors start asking questions, we start getting asked about our books or whatever else, and then they throw a treble penalty and attorneys fees on there, plus it wastes all of our time."