A recent Law360 story by Clark Mindock, “Quinn Emanuel, Others Get $9.4M Atty Fee in Securities Suit,” reports that a Delaware federal judge has awarded $9.4 million in attorney fees to Quinn Emanuel and others representing energy management software company C3 Inc. in a shareholder suit alleging fraud in a stock-swap deal, trimming an originally requested amount.  U.S. District Judge Colm Connolly awarded the attorney fees after receiving recommendations from a special master overseeing the case who found just two out of five arguments raised by the investors against the award had merit.

The judge agreed with the special master that it was appropriate to trim $1 million from the original $10.1 million requested since the award for attorney fees shouldn't include fees related to litigated holdback claims.  Judge Connolly also determined that a further reduction of 3% was appropriate after the special master suggested the court consider whether block billing and redactions in the request were indicative of potential bad faith.  "I agree that defendants' block billing could obscure bad-faith expenditures related to the holdback claim," Judge Connolly said, before adding he was exercising his discretion to reduce the fee beyond the $1 million by 3%.

The C3 firms sought the fees after fending off a suit brought by investors accusing the company of securities fraud and breach of contract.  Seeking reimbursement for the attorney work, C3 said its lead counsel Quinn Emanuel Urquhart & Sullivan LLP billed 11,197 hours over five years, accounting for $9.7 million in fees.  Four other firms — Cooley LLP, Morris Nichols Arsht & Tunnell LLP, Potter Anderson & Corroon LLP and Parkowski Guerke & Swayze PA — accounted for another $400,000, they said.

In March, Judge Connolly rejected an initial attorney fee bid for the $10.1 million, saying an outside observer may need to review the matter.  He then punted the case to the special master who made the recommendations that have now been accepted by the court.