United States District Court, D. Delaware
October 28, 2014, I entered a final order and judgment (D.I.
74), which did not decide one issue, namely, who should get
"attorneys' fees" and "reimbursement of
costs and expenses, " and how much that should be.
(Id. at ¶ 14). Plaintiff was requesting $1,
000, 000 in attorneys' fees and expenses, a number to
which Defendants had agreed. (D.I. 85-1, p. 5). On July 1,
2015, I issued an opinion deciding both parts of the issue,
namely, that Plaintiff should get $550, 000 in
"attorney's fees and expenses." (D.I. 78, p.
followed an appeal. The Third Circuit vacated the
"portion of the [opinion] awarding plaintiff $550, 000
in attorneys' fees and expenses, " and remanded
"for an award of fees and expenses consistent with [the
Court of Appeals' opinion]." (D.I. 85-1, p.21). The
Court summed up its rationale as the award "was at least
partially based on factual assertions which were not
supported by the record, and [that I] failed to provide an
adequate explanation ... so that... a reviewing court [has] a
sufficient basis to review for abuse of discretion."
(Id.). Thereafter, I had a status conference with
the parties. (D.I. 87, 88). At my request, Plaintiff provided
an update on his time and effort spent on this case
subsequent to my July 1, 2015, order. (D.I. 89). In short,
Plaintiffs attorneys' fees were an additional $101,
183.50, and Plaintiff had additional expenses of $ 3, 126.26.
Court of Appeals' opinion pointed out one outright error
in my earlier decision, namely, that I omitted to consider
Plaintiffs expenses, which totaled $14, 606. (D.I. 85-1, p.
21 n.8). That was an oversight. I should have awarded Plaintiffs
expenses, which were reasonably incurred. I also believe
that, since Plaintiff was successful in his appeal, I should
award him his additional attorneys' fees and expenses.
Thus, as a starting point, I would now award $651, 183.50 in
attorneys' fees and $17, 732.26 in expenses, a total of
$668, 915.76. Thus, with the understanding that the maximum
amount that Plaintiff is seeking is still $1, 000, 000, 1
will consider the issues on which the Third Circuit remanded
Third Circuit identified a number of issues, on which there
was insufficient record or insufficient explanation, as
issues that I needed to reconsider. I would summarize them as
"not point to anything in the record supporting" my
conclusion that "what happened here was not corporate
malfeasance, it was corporate carelessness." To the same
effect, I described what happened as "a 'one-off
mistake." (D.I. 85-1, p. 13).
"implie[d]" that a demand letter to the Board would
have resolved the dispute, but did not support this with
anything in the record. (Id.).
"suggest[ed], " without making clear what the basis
for me to say so was, that the Plan violation would have been
detected without investigation by Plaintiffs counsel.
(Id. at p. 14).
undervalued the recovery obtained by Plaintiff. (Id.
at pp. 15-17).
undervalued the time spent by Plaintiffs counsel.
(Id. at pp. 17-18).
gave an inadequate explanation for awarding $50, 000 for the
corporate governance reforms. (Id. at pp. 20-21).
the biggest single factor in my thinking about the proper
amount of attorney's fee award was my conclusion that
this was a "one-off mistake." I based this
conclusion on the explanation for the wrongfully issued stock
options. That was counsel's explanation during one of the
various status conferences I had with the parties. (D.I. 43
at 18 (Defendants' counsel: "one-time
occurrence"); see also Id. at 10-11 (Plaintiffs
counsel)). It was ABC's explanation in its August 7,
2013, Form 8-K filing with the SEC. In that filing, ABC
explained that the wrongfully-issued 2012 award was the
result of a change in the timing of when ABC reviewed equity
In November 2012, the [Compensation and Succession Planning]
Committee [of the Board of Directors] revised its policy on
the timing of annual equity awards to executives and other
eligible employees. Previously, the Committee reviewed annual
equity awards in February or March of each year. The
Committee now reviews annual equity awards in November of
each year. As a result, fiscal year 2012 equity awards and
fiscal year 2013 equity awards were made in the same calendar
(D.I. 30-3 at 3). The Form 8-K explanation is also consistent
with the recitation of events in Defendants' motion to
dismiss. (D.I. 12, pp. 13-14).
addition to ABC's explanation, which seems entirely
plausible to me, the circumstances are consistent with the
explanation. There was never any allegation that ABC
disguised or otherwise covered up the award. The components
that made up the improperly awarded options were publicly
disclosed, by which I mean that the amounts of awards were
stated in public securities filings. Assuming, as I did, that
the publicly reported Form 8-K explanation was an accurate
one, and ...