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Chancery Court Awards Partial Fee Amount Requested due to Litigation that was only Partially Responsible for Changes in Contested Deal

By Francis G. X. Pileggi, Esq.

 In re: BEA Systems, Inc. Shareholders Litigation, No. 3298-VCL (June 24, 2009), read letter decision here.  A prior Chancery Court decision in this case was summarized here.

 This short 2-page letter decision addressed a request for attorneys' fees in a case that arose out of the acquisition of BEA Systems by Oracle Corporation. The case was filed in early 2008 but was dismissed by stipulation on grounds of mootness in January of 2009 while reserving jurisdiction to consider this current fee application. The basis for the fee request was that, after the complaint was filed, the company made two changes to is proxy materials to deal with misstatements pointed out in the complaint.. Since the changes were presumably a result of litigation efforts, it was argued that the right to recover fees following the mootness dismissal should be granted based on the line of cases originating with Chrysler v. Dann, 223 A.2d 384, 386-87 (Del. 1966).
The court found, however, that most of the time and costs spent on the litigation produced no benefit, especially in light of the fact that the court had rejected the large majority of claims at an initial hearing on a motion for preliminary injunction. Therefore, recognizing the imprecision involved, the court attributed 'one quarter' of the time and costs spent as being attributable to the claims that resulted in the benefit. The court relied on the affidavits of counsel for fees at their normal hourly rate, and 'applying a reasonable risk premium of 50%' calculated a fee award, with costs, of  $81,297.
 

Full post as published by Delaware Corporate and Commercial Litigation Blog on June 26, 2009 (boomark / email).