A recent Law 360 story by Dean Seal, “Cohen Milstein Seeks $2.9M in Fees in $17M Opus Bank Deal,” reports that lead counsel for an investor that reached a $17 million settlement with Opus Bank over claims it misled investors about the quality of its loans has asked a California federal judge for a fee award of $2.89 million, more than $1 million less than the maximum amount the Cohen Milstein attorneys previously said they would seek.  The amount sought comes in at 17 percent of a settlement amount that came about after what the attorneys called a “complex and hard-fought litigation” to which they devoted approximately 2,441 hours and burned through nearly $100,000 in expenses, which they’ve also asked to recoup from the settlement fund.

“Absent lead counsel’s willingness to accept the risks inherent in pursuing complex litigation on a contingency basis, the class likely would not have received any recovery and certainly would not have received the settlement presently before the court,” lead counsel said.  “Thus, lead counsel respectfully submits that the substantial benefit achieved, as well as the significant financial risk lead counsel took in pursuing this action, warrants the requested 17 percent fee.”

The $17 million all-cash settlement, made public in January, resolves claims that the bank and its executives falsely represented that Opus had a disciplined and conservative approach to extending credit and instead repeatedly deviated from underwriting standards and extended credit guidelines.  The suit was initially launched in October 2016 after Opus announced that loan charge-offs would impact quarterly earnings; on the same day of the announcement, the company’s share price fell 21 percent.

The bank attempted to fend of the putative class action in June 2017, but before its arguments could be taken up in court, the parties entered into settlement negotiations and reached the proposed deal in November 2017.  After the January motion for preliminary settlement was filed, Cohen Milstein attorney Steven J. Toll told Law360 the proposed settlement was a good recovery for the proposed class of investors who purchased Opus stock between Jan. 26, 2015, and Jan. 30, 2017, and that the firm would seek no more than 25 percent of the settlement fund, or $4.25 million.

According to the filing, the $2.89 million fee request comes after lead counsel engaged in significant discovery that included the review of over 2,000 pages of documents, interviews with 30 witnesses and the deposition of Opus’ chief operating officer.  Of the 18,714 potential class members that received notice of the settlement and the fees and expenses request, none has objected and the lead plaintiff, the Arkansas Public Employees Retirement System, is in support of the request, lead counsel said.

The case is Schwartz v. Opus Bank et al., case number 2:16-cv-07991, in the U.S. District Court for the Central District of California.