The Delaware Court of Chancery awarded roughly $2.3 million in attorney fees to the minority shareholders’ counsel in the Orchard Enterprises merger litigation, based on the benefit created for the entire shareholder class. However, the court declined to award attorney fees to claimants who sought a related appraisal action, ruling their litigation sought only to benefit themselves, not all shareholders.
“If the same counsel had litigated a combined appraisal proceeding and plenary action from start to finish, I would have no difficulty awarding fees and expenses for the aggregate effort in both proceedings based on the total benefit conferred,” said Vice Chancellor J. Travis Laster in In re Orchard Enterprises Stockholder Litigation. “This decision awards $2,250,000 to plenary counsel for their role in creating the benefit. Because the appraisal claimants were content to pursue only their own interests and did not undertake to serve the interests of the class as a whole, they lack the standing to obtain a fee award for the appraisal counsel’s role in creating the benefit.”
