A recent Law 360 story by Rose Krebs, “3 Law Firms Seek $8M Fees for $42.5M Pilgrim’s Pride Settlement,” reports that Heyman Enerio Gattuso & Hirzel, Block & Leviton and Bernstein Litowitz Berger & Grossmann are seeking $7.95 million as part of a proposed $42.5 million settlement that would end a Delaware Chancery Court suit over chicken producer Pilgrim’s Pride Corp.’s $1.3 billion acquisition of an affiliated company. In a court filing the three firms argued the award request, which amounts to about 18.7% of the total settlement amount, is appropriate “given the excellent results achieved.”
“Plaintiffs are pleased to present the proposed settlement: a cash recovery of $42.5 million, plus corporate therapeutics that will help address issues that arose in the challenged transaction and ensure that Pilgrim’s Pride Corporation enjoys the full benefit of the cash recovery,” the filing said.
In October, a stipulated settlement was filed with the court that would end a minority stockholder derivative suit against Pilgrim’s Pride's director and the company’s controlling shareholder JBS SA over Pilgrim’s Pride's $1.3 billion acquisition of the U.K. poultry farm Moy Park from JBS.
In January 2018, shareholder Matthew Sciabacucchi filed suit targeting JBS, its founder and CEO José Batista, and Pilgrim’s Pride’s board over the acquisition. The suit said the transaction had been vetted by a special committee that wasn’t independent and went through a process that “did not seek or obtain approval of the company’s minority shareholders.” A subsequent suit by the Employees’ Retirement System of the City of St. Louis was consolidated with the Sciabacucchi suit, with Block & Leviton LLP, Heyman Enerio Gattuso & Hirzel LLP and Bernstein Litowitz Berger & Grossmann LLP appointed co-lead counsel.
The firms contend that given the results achieved, the complexity of the case and the work they put in, a $7.95 million fee and expense award is justified. The defendants and company have agreed not to oppose the request, according to the filing.
The firms also assert that the $42.5 million cash amount and corporate governance reforms that will be instituted per the settlement are “substantial,” and that the “get” under the deal “readily exceeds the ‘give’ of the release.” Among governance reforms will be a requirement that “truly independent advisors” will evaluate “significant related-party transactions” in the future, the filing said.