The case of In Re: Instinet Group, Inc. Shareholders Litigation, download file, involved the court’s approval of a settlement for counsel fees. The parties stipulated that if the court approved a fee request in the amount of $1,450,000 and expenses of $173,031 then the defendants would pay that amount if ultimately awarded by the court. The court considered the submissions of the parties and the arguments advanced by counsel at a hearing but only agreed to authorize a fee and expense total of $450,000. The complaint challenged the transaction between Nasdaq and Instinet alleging that the majority shareholder of Instinet had material interests in the transaction in which Nasdaq would acquire Instinet, which material interests were at odds with the interests of the minority shareholders. The complaint also attacked the “fiduciary out” provisions of the transaction and the disclosures made in the merger proxy statement. On June 29, 2005, the court granted a Motion for Expedited Discovery and set a hearing on a Motion for Preliminary Injunction for September 13, 2005. Thereafter, the plaintiffs engaged in voluminous discovery, and a Memorandum of Understanding dated August 30, 2005 was submitted with a Stipulation of Settlement on September 9, 2005. The settlement provided for the payment of $1 million in compensation to the minority stockholders of Instinet, a reduction in a breakup fee payable in the event of a superior transaction, and certain enhanced disclosures in the proxy material. The affidavit submitted indicated that the law firms involved in representing the plaintiffs spent in excess of 2600 hours prosecuting the case, having a nominal value of $885,795. There was proof of out-of-pocket expenses of more than $173,000, but $125,000 was paid for photocopying and related services, most of which was spent converting the document production from electronic to paper format. There is no dispute that because of litigation, a settlement that was approved as fair and reasonable and adequate, entitles the plaintiffs to “some award” of fees and expenses. Thus the only dispute is over the amount of attorneys’ fees and costs that should be awarded. The court reviewed the factors that are considered in the application of the court’s discretion in reviewing a request for attorneys’ fees and a settlement of a class action. The defendants argued that counsel for plaintiff should not be rewarded for having “inefficiently litigated the case.” The court noted the unnecessary increase in costs by printing the data produced in electronic format instead of having it reviewed on a computer screen. The court ultimately determined in its discretion that the amount of fees awarded should be reduced to about one-third of the total sought.