The Delaware Supreme Court has ruled in Tesla’s favour over an inflated legal fee allotment from opposition lawyers in the settled Tesla Director suit.
Originally, shareholder lawyers were awarded $176.1 million in legal fees after settling for a reported agreement valued at $919 million.
However, the Delaware Supreme Court reviewed the settlement. It confirmed that the legal fees were inflated because the court incorrectly included the intrinsic value of the returned stock options.
This value should have been excluded from the assessment.
As a result, the court slashed the total legal fees by sixty per cent to $70.9 million, a $105 million savings for Tesla.
Delaware, of course, is the legal home to many of the country’s Fortune 500 companies due to its flexible corporate laws and significant tax advantages for larger corporations. However, the recent influx of large legal fee distributions has started to dominate headlines.
As legal fees can be a high cost for these larger corporate organizations, lawyers and professors who work with corporate boards have started to raise the alarm about the rising legal fee rulings.
Delaware’s bar association is working on recommendations for legislative changes to bring these fees under control, but this work will take time to iron out with law makers and the lawyers involved.
