In re: Freeport-McMoRan Copper & Gold, Inc., Consol., C.A. No. 8110-VCN (Del. Ch. Jan. 25, 2013).
Selection of lead counsel and lead plaintiff in connection with the consolidation of about 18 related cases involving a challenge to various transactions.
Although the Court consolidated this multitude of cases pursuant to Court of Chancery Rule 42(a) because of common questions of law and fact and because consolidation facilitated the efficient resolution of the various claims, the disputes requiring the Court’s attention are among counsel and the plaintiffs who seek the designation of their clients as lead plaintiffs, and themselves to serve as lead counsel for the prospective classes of shareholders.
The Court referred to the six factors that it considers in determining who to select as lead counsel. See In re: Del Monte Foods Co. S’holders Litig., 2010 WL 555067, at * 4 (Del. Ch. Dec. 2010).
The Court narrowed the six factors to two: the quality of the pleadings and the relative economic interests of the shareholder and plaintiffs, and observed that there was “no persuasive reason or rationale [that] has been offered to distinguish among counsel and their clients on the basis of the other four criteria.”
The Court explained its reasoning for selecting three lead counsel firms and expressed its expectation that they will work together to arrange for significant activity by the other counsel that expressed a commitment to advance the interests of the derivative shareholders. The Court also designated C.A. No. 8145-VCN as the operative complaint, although it allowed lead counsel to select a different one. The Court designated as lead plaintiffs those who were represented by each of the designated lead counsel. The Court did not prescribe how the committees under lead counsel should be structured, and left it to counsel to work it out among themselves.