Tuesday, April 19, 2005

That Blood in the Water is the Sharks'

The Third Circuit Court of Appeals puts in its $55 million on The Private Securities Litigation Reform Act of 1995:

Rejecting an appeal brought by three law firms that demanded portions of the $55 million in attorneys fees awarded in the $3.2 billion settlement of the Cendant Corp. securities litigation, the Third Circuit U.S. Court of Appeals has ruled that the lawyers who were named to lead the case have the power to say who gets paid. .... "The PSLRA lead plaintiff is now the driving force behind the class's counsel decisions, and the lead plaintiff's refusal to compensate non-lead counsel will generally be entitled to a presumption of correctness," Senior U.S. Circuit Judge Edward Becker wrote. "The new paradigm of securities litigation significantly restricts the ability of plaintiff attorneys to interpose themselves as representatives of a class and expect compensation for their work on behalf of that class," Becker wrote....

And, that ain't all:

In a prior appeal, the Third Circuit had reversed an award of $262 million to the plaintiff lawyers after finding that U.S. District Judge William Walls of the District of New Jersey had erred when he held an auction to select the lead lawyers in the case. ....On remand, the lead plaintiffs and their lawyers... agreed to a $55 million fee award.

Which, for their 35,000 hours of work on the case, still comes in at a tidy $1,500 per hour.

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