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NY Judge Approves Fee Award in "Megafund" Case

July 6, 2010 | Posted in : Contingency Fees / POF, Fee Award, Fee Award Factors, Fee Dispute, Fee Request

A recent WSJ News Blog story, “New York Judge Signs Off on Hefty Legal Fee” reports that a New York federal court resolved a fee dispute in a pending securities fraud class action against Comverse Technology.  The company agreed last year to pay $225 million to settle the case.  Pomerantz Haudek, the lead plaintiffs’ law firm in the case, sought 25% of the settlement, or about $56 million in legal fees.  In the Comverse case, the Pennsylvania State Employees’ Retirement System, which owned shares in the company, claimed in court papers that the 25% attorney fee request was “unreasonable”.  But a Pomerantz Haudek lawyer said the firm’s client agreed to a 25% fee and that such an amount is “well within the normative range of these types of cases.”

U.S. District Court Judge Nichoals Garaufis agreed that the 25% fee was well within the norm of “megafund” securities fraud cases.  “While it may be that a lower percentage would also be sufficient, this court will not pretend that it has the expertise necessary to divine the ideal percentage,” the judge added.  “This court is particularly unwilling to undertake an endeavor in a case where the fee award was set on the open market, and where an improperly calibrated fee would provide a disincentive to future counsel to take risks and pursue large class settlements that the SEC cannot.”