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Judge Denies Attorney Fees for ‘Mooted’ Disclosure Case

February 5, 2024 | Posted in : Fee Award Factors, Fee Denial, Fee Request, Mootness Fees

A recent Law 360 story by Katryna Perera, “Volta Investor Denied Fees For ‘Mooted’ Disclosure Case”, reports that a New York federal judge has declined to award fees to lawyers who represented a Volta Inc. investor who sued the electric vehicle company over allegedly inadequate disclosures related to a potential acquisition, saying the disclosures the company later provided because of the suit didn't give the investing public any new or useful information.  U.S. District Judge Jed S. Rakoff issued an opinion and order denying a request for attorney fees from Wohl & Fruchter LLP, which represents plaintiff David Belcher.

Belcher launched his suit in February 2023, claiming that a preliminary proxy statement Volta issued concerning a potential acquisition by Shell USA Inc. was misleading because it didn't include "specific details" about Shell's relationship with Goldman Sachs and Barclays.  According to the order, Volta had asked the banks for advisory services in connection with the potential sale to Shell.

However, Volta ended up supplying the information Belcher requested in advance of the shareholder vote to approve the sale, so the case became moot. Belcher then moved for attorney fees, arguing that his suit "created a common benefit for Volta shareholders by causing Volta to provide those supplemental disclosures."

But Judge Rakoff disagreed, saying that while there is no doubt that Belcher's suit "played a substantial role in the defendant's decision to take corrective action," Belcher has not identified any false or misleading statements in the preliminary proxy statement that needed correction to begin with.  The judge added that the supplemental disclosures consisted of publicly available information and were, therefore, not material.