One of the biggest fee fights we have ever seen has made it’s way into news. The plaintiff is a substantial derivative lawsuit against Tesla is seeking almost $230 million in attorneys fees. That’s not a joke. That’s not an exaggeration.
The backstory is this: The Police and Fire Retirement System of the City of Detroit sued Tesla’s board for overpaying themselves from 2017 to 2020. We’re talking substantial sums of money. The case ended up settling for $735 million (cash & stock) and the directors forging three years of pay (worth $184 million).
The plaintiffs then sought attorneys fees, which they calculated based on a $919 million win for Tesla. The amount? $230 million (about 25% of the total settlement value). Tesla disputes that this the proper amount owed —— arguing that the actual benefit to Tesla is really $290 million. As a result, the attorneys fees would end up being a whopping 78% of the benefit. Using this calculation, the Tesla argues that attorneys fees should actually be closer to $63,530,830.
Will the settlement get derailed over this massive fee fight? We will see.