A recent Law 360 story by Rose Krebs, “Southern Copper Opposes 2 Firms’ $7.5M Fee Bid in Chancery,” reports that Southern Copper Corp. is arguing that Delaware Chancery Court should give Andrews & Springer LLC and Friedman Oster & Tejtel PLLC roughly half of the $7.5 million in fees they requested after reaching a proposed $24.5 million settlement of a stockholder suit asserting the company was exploited by controlling investors. In a brief filed Wednesday in "limited objection" to a bid by stockholder plaintiff Carla Lacey, who is represented by the two firms, Southern Copper argues that $3.675 million would be a more reasonable award than the $7.5 million sought for attorney fees and expenses.
"Plaintiff requests a fee representing 30.6% of the $24.5 million monetary settlement that was reached at an early stage of this case, which is a spin-off from a related case involving the same plaintiff and counsel," the brief said. "To support this excessive request, plaintiff touts supposed non-monetary corporate benefits that largely occurred before this case was filed and which counsel contends were sparked by their work in the prior case — for which they were already richly compensated in that prior case."
Southern Copper's counsel was referring to a settlement approved by Vice Chancellor Sam Glasscock in 2019 to end another suit filed by Lacey over the purchase of two Southern Copper power plants by Mexican mining giant Grupo Mexico SAB. Class claims in that case, which asserted the $300 million acquisition was unfairly structured, were settled for $50 million, with $13.5 million awarded in attorney fees for class counsel and a $5,000 incentive award for lead plaintiff Lacey.
Southern Copper said that it filed "this limited objection because the 30.6% fee request is excessive and would unreasonably deprive Southern Copper and its stockholders of a portion of the settlement." Other defendants in the case joined Southern Copper's objection, court records show.
In a brief made public earlier this month, Andrews & Springer and Friedman Oster told the court they are seeking the $7.5 million for work on the proposed settlement, which would end a more than two-year battle over stockholder allegations Southern Copper has been exploited by its controlling investors. The two law firms argued the fee bid is reasonable given the "benefits secured through the $24.5 million cash settlement payment" along with corporate governance reforms made while the suit was being litigated. Lacey is also seeking a $5,000 incentive award for "her efforts in asserting and prosecuting this action," the firms said.
Under the stipulated settlement filed with the court in September, AMC is set to pay Southern Copper $24.5 million to end the suit. Defendants make no admission of any wrongdoing under the proposed settlement. In the brief made public last week, Lacey's counsel contended that she also secured other benefits for Southern Copper, including enhanced "procedures for reporting, documenting and reviewing related party transactions" and that her "litigation efforts also caused SCC's appointment of two new independent directors."
Those benefits, in addition to the cash settlement, should lead the court to approve the incentive award and $7.5 million fee and expenses award, the brief said. But Southern Copper argued in the filing that "the company instituted a number of corporate actions during" the first Lacey suit, accusing the plaintiff of trying to "double-dip" by asking for $7.5 million now.
"Notwithstanding that plaintiff's counsel were well-compensated for their work in Lacey I, which made this follow-on case relatively straightforward, plaintiff's counsel asks that the court divert 30.6% of the $24.5 million monetary settlement to them despite the early stage of litigation," Southern Copper argued.