COLUMBUS, Ohio (Legal Newsline) – A proposed $180 million settlement that nets lawyers almost $50 million has drawn some objections as a federal judge decides whether to accept the agreement, which would end a lawsuit over a $60 million bribery scandal at FirstEnergy.
Shareholders of the company sued after allegations it sent $60 million to then-Ohio House Speaker Larry Householder came out. The money was allegedly in exchange for legislation that would bail out the company’s failing nuclear power plants.
In response to the accusations, FirstEnergy formed a “Special Litigation Committee,” which filed an objection over $48.6 million proposed to go to plaintiffs lawyers.
“Plaintiffs’ fee request… seeks to deprive FirstEnergy of much of the monetary value of the settlement, proposing that Plaintiffs’ counsel receive nearly $50 million that would otherwise be paid to the company,” the objection says.
“While the SLC appreciates Plaintiffs’ counsel’s efforts on the company’s behalf and believes they should receive a reasonable fee award to compensate them for their efforts, Plaintiffs’ current fee request is not reasonable and should be rejected…”
The SLC says the fee request ignores the work it and its lawyers did in crafting corporate governance reforms. Its objection says the fee request should not exceed $24.3 million – 13.5% of the settlement.
“Plaintiffs cannot meaningfully dispute that the very significant value provided to the Company by virtue of the corporate governance reforms in the Settlement (and of the Settlement as a whole) cannot be attributed solely to Plaintiffs, and the Fee Request must be reduced accordingly, as other courts have done in similar circumstances,” the objection says.
The litigation is led by Bernstein Litowitz and Saxena White, who motioned July 7 for final approval of the deal. Insurers would pay the $180 million, and six defendants would be required to leave the board of directors.
The deal also adds new duties for the new board like “actively” overseeing spending and lobbying activities.
Litigation followed the FBI’s complaint against Householder and two FirstEnergy lobbyists.
Householder has pleaded not guilty to the alleged bribery scheme. It started in 2016, when FirstEnergy told investors it was seeking “legislative solutions” to the financial problems at two of its aging nuclear plants in Northern Ohio.
Householder was running for a House seat he previously held. He resigned in 2004 after bribery allegations arose. But his district’s voters picked him to retake the seat and he took office in 2017.
FirstEnergy flew Householder to D.C. for the presidential inauguration and allegedly began making quarterly payments of $250,000 to Householder’s PAC, Generation Now.
FirstEnergy and its subsidiaries put tens of millions of dollars into entities controlled by Generation Now as Householder mounted a campaign to be named House Speaker, it is alleged.
Once speaker, Householder helped HB6 get passed, which charged ratepayers a monthly surcharge. It was essentially a $1.3 billion bailout.
The FBI called it a “sophisticated criminal conspiracy to enact legislation.” Voters were given a ballot initiative to overturn the bailout, and First Energy spent $38 million to defeat it.
Ohio federal judge Algenon Marbley is mulling the objections of the SLC and others.