BestLawyerTips | News – On March 1st, Wilmington, Delaware (Reuters) – Zhao, who spoke on behalf of the lawyers that went on record regarding the excessive salary of $56 billion offered to Elon Musk is seeking court permission for a record of $6 billion that will be repaid in the company’s shares.
“Notice the request fee suggested for pre-trial expense has not been matched by any previous litigation in terms of absolute size,” the three teams of attorneys stated in their application with the Court of Chancery of Delaware.
The plaintiff alleges in the serf complaint that they are being charged $10 millions per hour which equals $288,888 per hour.
The payment for these legal entities will come from Tesla (TSLA.O), opening a new account for the lawyers, who defended Richard Tornetta, the Tesla shareholder, who filed a class action suit against Musk in 2018 over the compensation package. In January 2023, the judge of Delaware rejected the claim, and now, it is time for the lawyers to review their invoice.
The electric vehicle manufacturer asked to pay the charge, as it is the company that made profit from Musk recognizing the compensation package and hence, their legal advisor asserted that it will aid the automaker to obtain a 266 million share return.
The motion has top priority in the case present in court led by Judge Kathaleen McCormick; this is where the ruling is to be made. She proves that getting paid by Musk was incomprehensible for someone whose workload was very light or even non-existent and at the same time enjoying a lot of money while the average minimum wage worker is paid so little.
Similarly, neither of the persona attributed to Turvy, Musk or Musk’s lawyer was able to respond till the end of the comment section of the article while the same people but with names this time did not provide their comment. Moreover, the persona of the company named Tesla, Musk or Musk’s lawyer as well did not reply to the article. The company might establish an objection to it on the grounds that its besides pursuit charge in a similar application about their directors remuneration.
In the viewpoint of the shareholder’s lawyers, “such arrangement links the payment downstream (the benefit created) to the proceeds upstream (the tax) while avoiding the payment of one cent of the company’s balance sheet to pay for the attorney’s fees.” Therefore, Tesla can also deduct the amount from its taxes.
Interestingly, the biggest was the $688 million for the lawyers that managed to rack $7.2 billion in a securities suit that collapsed Enron. We see these kinds of negotiations, mega-settlements, happening most of the times in federal courts.
The Tesla’s request for a fee comes along with the U.S. Supreme Court decision on whether a Delaware Supreme Court should take on or not an appeal that the Dell Technologies’ (DELL.N) deal settled for a billion dollar.
Delaware restrains the judges from giving more than 65-35% at trial. A larger portion of the recovery should be awarded to the cases that need to go through depositions, trial and beyond in order to balance the risk and work associated. A one-week trial was held in a gauntlet called Musk Pay case.
Those detractors of this strategy said that in order to avoid overcompensation, such a lawyer should only retrieve a decreasing percentage from the settlement and judgment proceeds as their size grows.
The counter side of the defense lawyers claimed that 11% of the amount was possessed as a cost which was demanded.
As a part of compensation package, Musk received stock options, which he could purchase with five year hold-time, with the same period of time at at a heavy discount. As far as the legal team is concerned, they seek to sell the stock that is governed by any institutional constraints.
The three law firms that represented the shareholders as a whole were: Andrews and Springer of Wilmington, New York’s Friedman, Oster & Tejtel, and New York’s Bernstein Litowitz Bergher & Grossmann.
Source: Reuters.com
