Oliver v. Boston University, No. 16570-VCN (Del. Ch., May 29, 2009), read letter decision here. Prior opinions in this case by the Chancery Court were summarized here on this blog. This latest decision addresses a few open issues after the approval of a class action settlement.

Issues Addressed and Decided

  1. Award to Lead Plaintiff. The court awarded $40,000 to the lead plaintiff for the estimated 2,000 hours that the lead plaintiff spent to help class counsel pursue the action on behalf of the class. The court observed that: "Awards to representative plaintiffs should be rare. Only in exceptional cases should such an application be granted." (see footnote 1). The court reasoned that this was one of the "unusual circumstances in which compensation of the lead plaintiff is appropriate" because he (i) was deposed extensively; (ii) attended each day of trial; (iii) helped with document review and located a key document from a large set of documents; and (iv) his background brought a degree of knowledge and expertise to the task.
  2. Shifting of Attorneys’ Fees. The court refused to shift fees based on allegations of bad faith conduct on the part of defense counsel during the course of the litigation, nor did the court find sufficient merit to an argument that there was a conflict among defense counsel. (see footnotes 3, 4 and 6).
  3. Settlement Proceeds Not Being Fully Disbursed. The court determined that the attorneys’ fees would be based on the total settlement amount even if the total proceeds were not completely disbursed. There was an issue, however, of not being able to identify all the shareholders to whom the settlement was to be disbursed. The court noted that leftover, unclaimed settlement funds often are given to charity. Based on the facts of this case, the court explained the basis for its reasoning for allowing Boston University, as a charity, to retain any  leftover settlement funds.
  4. Costs and Expenses. The court awarded costs pursuant to Rule 54(d) and an additional amount for expenses not covered by the settlement.
  5. Structuring and Funding of the Settlement. Although the amount of the judgment was $2.8 million, and it was not disputed that interest should accrue from 1998, because it took seven years to bring the case to trial, the court did not impose interest to start on attorneys’ fees until beginning with the year 2004. Moreover, the court allowed the defendants to fund the judgment on an "as due" basis in light of the likelihood that a substantial portion might revert back to Boston University in the end.