Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes


News Blog

Category: Expenses / Costs

$90M in Fees in Kraft-Heinz Shareholder Class Settlement

September 20, 2023

A recent Law 360 story by Ryan Harroff, “Kraft-Heinz Shareholder Class Counsel Gets $90M in Fees”, reports that an Illinois federal judge awarded $90 million in fees to class counsel for the Kraft Heinz Co. investors who accused the company and a Brazilian private equity firm of hiding the snack food maker's cost-cutting measures after a merger to cover up a $15.4 billion goodwill impairment.

U.S. District Judge Jorge L. Alonso said in his order that the investor class' counsel from Kessler Topaz Meltzer & Check LLP, Bernstein Litowitz Berger & Grossmann LLP and other firms worked with "skill, perseverance, and diligent advocacy" to secure the $450 million total settlement that their clients agreed to with Kraft Heinz and 3G Capital Partners, the private equity firm that guided the 2015 merger between H.J. Heinz Co. and Kraft Foods Group Inc.  According to Judge Alonso's order, class counsel will also receive $2.6 million to cover litigation expenses on top of its 20% cut of the settlement fund.

The settlement is believed to be one of the largest pretrial securities deals in history and is the largest deal of its kind in the Seventh Circuit. Judge Alonso gave his preliminary approval to the agreement in May and issued final approval in a minute order Sept. 12.

Investors first filed suit in 2019, alleging Kraft Heinz engaged in shady accounting practices and cost-saving strategies that harmed its own supply chain, lost it customers and made potential new investors too nervous to buy in to the company, all while publicly stating it was saving money because of "synergies" from the 2015 merger.

3G Capital — which according to the suit owned 24% of Kraft Heinz and installed seven of its own partners as the new company's senior executives or board members — had directed Kraft Heinz's actions and overseen its belt-tightening moves, the investors had said.  Those cost-cutting measures lost shareholders a net $12.6 billion after the resulting supply chain and customer issues caused the company to write down the value of its own brands by $15.4 billion, they alleged.

Attorneys for the shareholders had asked the court in August for the $90 million they have now been awarded, estimating that their firms had collectively spent over 112,000 hours working on behalf of their clients to get the settlement on the books.  Judge Alonso also noted the substantial time investment in his order granting their request.

$2110 Billing Rate Sought in Deutsche Bank Settlement

September 18, 2023

A recent Law 360 story by Katryna Perera, “Epstein Victim Atty Want $22.5M Fee in Deutsche Bank Deal”, reports that attorneys for victims of Jeffrey Epstein suing Deutsche Bank over claims that it improperly kept Epstein as a client despite knowledge of his sex trafficking scheme have asked a New York federal judge for a $22.5 million fee award and roughly $1.1 million in litigation expenses for their work in resolving the case. 

In a motion for attorney fees, attorneys for the suit's lead plaintiff, identified as Jane Doe 1 in the case, said their performance in the litigation resulted in a $75 million settlement with Deutsche Bank that will provide "life-changing relief to Jeffrey Epstein's victims," since the recovery from the deal is much greater than the average recovery the victims received from Epstein and his estate.

Under the deal, each eligible class member will receive an award of between $75,000 and $5 million.  The attorneys from Boies Schiller Flexner LLP and Edwards Henderson Lehrman PLLC say they worked for more than 11,000 hours on the litigation, which was "factually and legally complex."

"Class counsel vigorously pursued claims pursuant to the Trafficking Victims Protection Act and state-law tort claims against sophisticated defense counsel, litigating the case past a challenging motion to dismiss and through a robust fact and expert discovery period," the motion states.  "And because there have been no prior actions against banking institutions under a TVPA beneficiary liability claim, the quantity of damages a jury would award is far from certain."

If the case had gone to trial, there would have been significant risks, including that each class member would have had to provide the amount of damages they were entitled to based on "recounting personal and intimate information," the motion states.  Therefore, the settlement is an "excellent result," the motion states, and the 30% requested fee award "is more than justified."  The $75 million deal was preliminarily approved by the court in June, and it calls for relief for women and girls who were sexually abused or trafficked by Epstein or his associates from Aug. 19, 2013, to Aug. 10, 2019.

Ford Wants $500M Fee Request Halted Amid $1.7B Verdict

September 14, 2023

A recent Law 360 story by Madeline Lyskawa, “Ford Wants Atty Fee Issue Halted Amid $1.7B Verdict”, reports that Ford Motor Co. urged a Georgia state judge to halt proceedings tied to a family's request for more than $500 million in attorney fees while the company appeals a $1.7 billion verdict in a fatal truck rollover case, just a day after the judge rejected Ford's request for judgment or a new trial.

Gwinnett County State Court Judge Joseph C. Iannazzone denied the car manufacturer's request for a new damages trial, as well as its request for judgment notwithstanding the verdict, in post-trial orders filed simultaneously.  Wasting little time, the company promptly announced its intention to appeal those orders and filed a motion to stay all proceedings related to plaintiffs Kim and Adam Hill's pending motion for recovery of attorney fees and expenses under Georgia law.

"Staying the fee proceedings pending a final appellate resolution of Ford's post-trial motions will ensure that limited judicial resources do not go to waste.  It will also ensure the parties do not incur unnecessary expenses of their own," Ford said in its motion. 

According to court documents, Kim and Adam Hill's parents Melvin and Voncile Hill were driving their 2002 Ford F-250 Super Duty in April 2014 when the truck's front right tire exploded, causing a rollover that collapsed the roof and killed the couple.  Kim and Adam Hill subsequently sued Cooper Tire & Rubber Co. and Pep Boys in December 2014, claiming they were responsible for installing the wrong tire model for the truck; the companies settled the case before trial in 2018.  In the interim, the siblings also sued Ford in July 2016, accusing it of knowingly selling trucks with weak, defectively designed roofs and failing to warn consumers about the danger.

The case against Ford went to trial in 2018, but ended in a mistrial after a Ford expert violated a court order by testifying on the cause of the couple's death, resulting in sanctions for the company, but not its attorneys.  In the sanctions ruling, the court found Ford liable for the couple's death, holding the weak roof crushed them and thus caused their deaths, and the company's failure to strengthen the roof was willful and reckless because it knew of the dangers and had a duty to warn drivers.

When the case headed to a narrowed second retrial last year, the siblings secured a verdict totaling $1.7 billion in punitive damages and $24 million in compensatory damages, prompting Ford to file various post-trial motions, challenging aspects of the trial, the size of the award and the judge's sanctions ruling.

Unpersuaded by the company's contentions, however, Judge Iannazzone rejected Ford's arguments across the board, saying the trial record doesn't support its claim that the jury's 10-figure damages verdict was the result of "prejudice, bias or gross mistake" or was driven by a "corrupt motive" among jurors.  The judge also said he wasn't convinced his pretrial sanctions ruling "polluted" the jury's damages calculations, violated Ford's right to a jury trial or prevented the jury from tethering punitive damages to the injuries at issue.

Notably, Judge Iannazzone has yet to rule on the Hills' request for attorney fees ranging from $549 million to $686 million, which the siblings' filed in September of last year and Ford opposed a month later, calling the request premature.  Now, Ford says the judge should pause his consideration of the motion until the conclusion of all appellate proceedings concerning the company's post-trial motions.

Such a pause is backed by the Georgia General Assembly's prohibition on courts ordering the payment of attorney fees until after the remittitur of any appeal of the underlying judgment, Ford said.  Furthermore, judicial economy supports a stay, the company said, noting that should an appellate court grant Ford a new trial or direct the entry of judgment in its favor, the basis of the siblings' fee request would disappear.

Michael B. Terry of Bondurant Mixson & Elmore LLP, an attorney representing the siblings, told Law360 despite Ford's contentions, there is no prohibition on the court going forward with holding a hearing on his clients' motion and from entering a fee award before the company's appeal is seen through.  Rather, the only thing that is not allowed is for the court to enter judgment on an attorney fee award during the appeal.

"So we see no reason to postpone this, and it seems like it's just for delay," Terry said.  "As we explained to the court in the hearing in December of last year, it makes sense to have the fee award finalized before the appeal on the main case so that both the fee award and the main judgment can be appealed at the same time."

$89M in Professional Fees in Crypto Broker Voyager Chapter 11

September 13, 2023

A recent Law 360 story by Hilary Russ, “Kirkland Lands $28M in Fees in Crypto Broker Voyager Ch. 11”, reports that a New York judge approved nearly $89 million in fees for lawyers and other professionals — including $28 million for debtors' counsel Kirkland & Ellis LLP — working on the bankruptcy case of defunct crypto broker Voyager Digital, despite an outburst from an angry creditor.

U.S. Bankruptcy Judge Michael Wiles granted the final fee applications from 17 different law firms, financial advisers, investment bankers, agents, consultants and tax services providers employed by the debtors and the official committee of unsecured creditors.  An additional $1.3 million was granted to cover total professional expenses since the start of the case.

Amid the spectacular crash of the cryptocurrency industry, Voyager filed for Chapter 11 protection in July 2022 after crypto hedge fund Three Arrows Capital defaulted on a $650 million loan, casting the brokerage and trading platform into a liquidity crisis.  In April, the company pivoted to a liquidation of its $1 billion in assets after a purchase agreement with Binance.US collapsed.

Plan administrator Paul Hage is now liquidating remaining crypto assets for Voyager customers who did not make full withdrawals, with more than 500,000 checks to go out to creditors in coming weeks, his lawyer Darren Azman said during a telephonic hearing.  In the next couple of weeks, ex-Voyager clients should also be able to access a new customer portal, similar to a revamped Voyager app, where they can find their historical transaction information and get updates.  "We're working very hard on this," Hage said during the hearing. "It is not an insignificant undertaking."

Professional fees have been garnering increased attention in the extremely complex crypto cases.  Fees in five big crypto bankruptcy cases — FTX, Voyager, Celsius Network, BlockFi and Genesis Global — have topped $700 million altogether since last year, according to a New York Times analysis published last week.  The final fee requests in Voyager's case did not face any objections.  But two former clients of the platform, who represented themselves during a hearing, questioned some aspects of professionals' work and unsuccessfully requested a delay in payouts.

Feds Question $23M Fee Request in PACER Overcharge Case

September 12, 2023

A recent Law 360 story by Hailey Konnath, “Feds Question $23M Fee Request in PACER Overcharge Spat”, reports that the U.S. government urged a Washington, D.C., federal judge to "carefully examine" nonprofits' $23 million attorney fee request in long-running litigation challenging PACER charges, saying the review is needed "to ensure that class members' rights and recovery are appropriately safeguarded.

The government said that the court should indeed grant final approval to the $125 million deal but that it should also "exercise its discretion" in determining the attorney fees and costs requested by lawyers with appellate boutique Gupta Wessler LLP and plaintiffs litigation firm Motley Rice LLC.  In particular, the government said the attorneys calculated their fee request using their 2023 hourly rates but didn't account for the fact that the litigation began in 2016, when those rates were likely lower.

And they've apparently calculated the request without consulting the D.C. U.S. Attorney's Office's Fitzpatrick Matrix, a table that breaks down the hourly rates for legal fees in complex federal litigation in the District of Columbia based on attorneys' years of experience, according to the filing.  That's evident because both firms have laid out rates that are significantly above those in the Fitzpatrick Matrix, the government said in its response.

"In light of plaintiffs' failure to satisfy their burden to establish that above-market rates are appropriate in this case, the court may wish to inquire as to the basis for counsels' rates, and determine whether a reduction in line with prevailing market rates pursuant to the Fitzpatrick Matrix rate is appropriate," it said.

The government agreed to pay $125 million to resolve the dispute last year.  In their suit, the National Veterans Legal Services Program, the National Consumer Law Center and the Alliance for Justice alleged that PACER fees paid by the public exceeded limits under the E-Government Act of 2002.  The Public Access to Court Electronic Records system provides public access to federal court records.  Under the deal, settlement class members would receive up to $350 for PACER fees they paid between April 21, 2010, and May 31, 2018, with those who paid more than $350 receiving an additional pro rata share of the remaining settlement funds.

The court has already preliminarily approved the agreement, and the class has been notified.  The nonprofits asked the court for final approval of the settlement and their fee request last month.  According to the nonprofits, the roughly $23 million represents about 19.1% of the settlement fund and is "below the average percentage fee awarded for funds of this size."

But the government said that the fee request includes approximately $900,000 in work that "has not yet occurred and may not occur."  The court may want to ask the nonprofits' counsel how they reached that number, it said, adding that their declarations "provide little, if any, explanation of those estimates."  The nonprofits have also requested a $1 million payment to the class administrator, a request that includes $100,000 for work that hasn't yet been done, according to the motion.

"Defendant does not take issue with the general approach of awarding plaintiffs' counsel a percentage of the common fund in this case, but here are indicia – including above-market hourly rates that plaintiffs' counsel have not shown to be reasonable and inadequately explained predictions of future work — that the common fund may be excessively depleted, to the detriment of class members, if plaintiffs' counsel are awarded the percentage of the common fund that they have requested," the government said.