Chief Justice Myron Steele
DOVER, Del. (Legal Newsline) - A group of plaintiffs' lawyers were expected to argue before the Delaware Supreme Court Thursday that their fee -- worth more than $300 million -- is justified.
Both sides in the case were to be given about a half an hour to argue before the state's high court, which will most likely issue a ruling in the next few months, Reuters reported Wednesday.
The $304 million fee was awarded to law firms Kessler Topaz Meltzer and Check of Radnor, Pa., and Prickett, Jones and Elliott of Wilmington, Del.
According to Reuters, the fee breaks down to about $35,000 per hour of work.
The firms received the fee as the result of a $2.03 billion judgment awarded to shareholders of Southern Peru Copper Corporation, which became Southern Copper Corporation in October 2005.
The plaintiffs' attorneys fee was awarded as a percentage of the judgment, which was granted by Delaware Chancery Court Judge Leo Strine in October 2011.
The shareholders brought a derivative lawsuit against the Grupo Mexico subsidiary that owned the Mexican mining company Minera Mexico, the Grupo Mexico-affiliated directors of Southern Peru and the members of a "special committee" -- a group of supposedly disinterested directors tasked with evaluating the transaction with Grupo Mexico.
In February 2004, Grupo Mexico proposed that Southern Peru buy its 99.15 percent stake in Minera.
The shareholders, in their lawsuit, alleged that the merger was entirely unfair to Southern Peru and its minority stockholders.
"The crux of the plaintiff's argument is that Grupo Mexico received something demonstrably worth more than $3 billion (67.2 million shares of Southern Peru stock) in exchange for something that was not worth nearly that much," Strine explained in his Oct. 14, 2011 opinion.
The defendants, Strine found, breached "their fiduciary duty of loyalty."
"I remedy that unfairness by ordering the controller to return to the NYSE-listed company a number of shares necessary to remedy the harm. I apply a conservative metric because of the plaintiff's delay, which occasioned some evidentiary uncertainties and which subjected the controller to lengthy market risk," he wrote in his 106-page opinion.
"The resulting award is still large, but the record could justify a much larger award."
Two months after Strine awarded the judgment, he approved the law firms' fee.
The defendants, in response, appealed to the state Supreme Court, arguing that it is too high.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.