In Kurz, et al. v. Holbrook, et al., C.A. No. 5019-VCL (Del. Ch. Mar. 2, 2010), read decision here, plaintiffs filed an application for an interim award of fees and expenses, while the Court’s post-trial opinion issued on February 9, 2010 entering a partial final judgment pursuant to Rule 54(b) resolving competing request for relief under 8 Del. C. § 225 was being appealed to the Delaware Supreme Court. The prior 80-page opinion addressing issues of first impression in connection with efforts to reduce the size of a board was highlighted on this blog here.

Kevin Brady of the Connolly Bove firm prepared this synopsis.

The Court started by stating that it will defer considering the plaintiffs’ application until after the Supreme Court rules. Then, noting that interim fee applications are generally "disfavored," the Court nonetheless noted that "this case offers the rare situation where one is appropriate." The Court noted that the benefits (and the appropriate amount of the fee) can be determined with respect to the mooting of the plaintiffs’ application for injunctive and equitable relief, and for the liability phase: 

[i]t will be helpful to have quantified the fee award so the parties can address concretely whether the amount should be incorporated in the calculation of damages suffered by the Company. That said, the interim fee petition does not need to be litigated immediately, while the appeal is pending. Doing so would require me to contemplate procedural issues that I may never need to address.  

The Court did pose some interesting questions regarding the current situation such as: (i) if the current board remains in place and takes no position on the fee application, is notice to stockholders required? and (ii) what if the Supreme Court reverses the Vice Chancellor’s decision and the current board is unseated, would notice to the stockholders be required and would the Company oppose the fee application? 

Finally, coming full circle, the Court stated that "[n]othing about the schedule for the damages portion of this case necessitates a ruling on the interim fee application prior to the issuance of the Delaware Supreme Court’s decision on appeal. I do not want this matter to drag, but I do not see any reason for expedition."