COLUMBUS, Ohio (Legal Newsline) – A federal judge has finalized the settlement of a lawsuit brought by a shareholder of Abercrombie & Fitch that claimed the company’s board of directors and former CEO did not manage it properly.
The plaintiff, the City of Plantation Police Officers’ Employees’ Retirement System, of Florida, formally filed its complaint against former CEO Michael Jeffries and the Board of Directors on Aug. 29.
A settlement was already in place by the time the complaint was filed, but U.S. District Judge James Graham, of the Southern District of Ohio, did not grant approval.
The new settlement formalizes corporate reforms the company has already put in place while providing more than $1.6 million to the attorneys who represented the plaintiff.
The plaintiff alleged mismanagement of the company caused it to be outperformed by its peer industry group by 369 percent from 2008 until mid-2014.
It said Jeffries received more than $140 million in compensation in that time, as well as massive personal and business-related travel expenses.
Also alleged was that Jeffries delegated “managerial-like authority” and access to nonpublic documents to Matthew Smith, who was not employed by the company.
The Board of Directors knew of these problems but failed to take action, the plaintiff alleged.
The firms representing the plaintiff were: Bernstein Litowitz Berger & Grossman of New York City; Strauss Troy of Cincinnati; and Klausner, Kaufman, Jensen & Levinson of Plantation.
Magistrate Judge Norah McCann King slashed the firms’ fee request by more than $1 million in her Dec. 29 report.
The attorneys requested no more than $2,775,000, but the court approved only $1,655,241.58.
“Plaintiff has not, however, provided any evidence whatsoever of the reasonableness of the hours expended or of the rates charged,” King wrote.
“There is also no evidence that the rates charged are plaintiff’s counsel’s standard hourly rates. Rather, plaintiff’s counsel represented at the fairness hearing that the rates charged in this matter were in line with rates charged in a ‘national [professional] community’ and that plaintiff’s counsel’s rates are lower than the rates charged by competing firms.”
Among the cuts made by King was the $8,990 in fees requested for 29 hours of work performed by Kenneth Cardwell, who is identified as a case manager at Bernstein Litowitz.
King wrote that it appears Cardwell only performed clerical work and refused to include his work in the fees award. U.S. District Judge James Graham adopted her report fully in a Thursday order.
From Legal Newsline: Reach editor John O'Brien at email@example.com.