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Plaintiffs' Firms Plan for $150M Fee Request in BofA Case

October 1, 2012 | Posted in : Contingency Fees / POF, Fee Expert / Member, Fee Request

A recent Thomson Reuters story, “Plaintiffs’ Firms Plan for $150M in Fees in BofA Case,” reports that plaintiffs’ law firms at the center of the $2.43 billion class action settlement with Bank of America Corp are expected to apply for $150 million in attorney fees, a spokesman for the Ohio attorney general said Friday.  The sum, while hefty, only amounts to 6 percent of the settlement, a relatively modest contingency fee rate for what is the largest recovery in a securities class action arising out of the financial crisis.

The firms have yet to file a formal fee request, which like the settlement, would be subject to approval by U.S. District Judge Kevin Castel in Manhattan.  The law firms include Bernstein Litowitz Berger & Grossman, Kessler Topaz Meltzer & Check, and Kaplan Fox & Kilsheimer.  The firms are expected to split the fees.

The litigation itself centered on allegations that Bank of America made false statements and omitted facts related to its 2008 acquisition of Merrill Lynch, subsequent losses it suffered and plan to award $5.8 billion in bonuses.  Bank of America’s stock subsequently fell when facts about the merger emerged, the action claimed.  Bank of America denied the allegations.

Attorney fee experts said the expected fee, while large was within the range of past massive class action settlements, if not smaller percentage-wise.  The fee, if approved, works out to 6 percent of the settlement fund.  The percentage is lower than the median in securities class action settlement of more than $500 million, or 11.1 percent, according to Renzo Comolli, a senior consultant with NERA Economic Consulting.

The case is In re Bank of America Corp Securities, Derivative, and Employee Retirement Income Securities Act (ERISA) Litigation.