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Law Firms Seek $3.5M in Fees in HomeFed Buyout Settlement

February 3, 2022 | Posted in : Class Incentive Awards, Contingency Fees / POF, Expenses / Costs, Fee Allocation / Fee Apportionment, Fee Award Factors, Fee Request, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Rose Krebs, “Law Firms Seek $3.5M For $15M HomeFed Buyout Suit Deal,” reports that Andrews & Springer LLC, Friedman Oster & Tejtel PLLC, Labaton Sucharow LLP, Wolf Popper LLP and Kaskela Law LLC are seeking a roughly $3.5 million award in connection with a proposed $15 million settlement that would end a Delaware Chancery Court suit over Jefferies Financial Group Inc.'s acquisition of HomeFed Corp.  In a brief, the firms, representing investor plaintiffs Richard Rose and Dennis E. Murray Sr. on behalf of a proposed class of former HomeFed stockholders, said the settlement and attorney fees and expenses sought are reasonable and should be approved by the court.

"Plaintiffs and co-lead counsel respectfully submit that the fee and expense award fairly compensates plaintiffs' counsel in light of the size of the benefit conferred and the contingency risk and investment of time and resources undertaken by counsel in achieving that benefit," the brief said.  Andrews & Springer, Friedman Oster and Labaton Sucharow served as co-lead counsel in the consolidated stockholder action, while Wolf Popper served as additional counsel and Kaskela Law as other counsel for the investor plaintiffs, according to the brief.

The brief said the plaintiffs are seeking approval of an "all-in" $3.45 million award for attorney fees and expenses, representing 23% of the settlement fund. Vice Chancellor Lori W. Will is scheduled to consider the settlement and fee bid at a hearing later this month.  The proposed settlement would bring an end to the stockholder suit, which accuses HomeFed directors and Jefferies of unfair conduct in a $189 million, two-for-one stock deal that gave Jefferies all the HomeFed stock not already owned by the financial company.

Under a stipulated settlement filed with the court in October, the stockholders will drop their claims against Jefferies and the HomeFed directors in return for a $15 million payment to be made by the defendants or their insurers.  The defendants admit no wrongdoing under the proposed settlement.

In the brief, plaintiffs' counsel argued the roughly $3.5 million fee award sought "is reasonable and merited under the circumstances."  The brief said that "while the action did not reach trial, counsel undertook significant litigation activity over roughly two-and-a-half years."

Also, the proposed settlement "amounts to approximately $3.96 per class share, and a roughly 9.6% bump to the merger consideration" and "confers a significant benefit upon the class, particularly when considering the strengths of plaintiffs' claims weighed against the challenges, obstacles and risks of continued litigation," the brief asserted.  Co-lead plaintiffs Rose and Murray are each seeking incentive awards of $5,000 "to compensate them for their time and effort in diligently litigating the action," the brief said.