Edgewater Growth Capital Partners L.P. v. H.I.G. Capital, Inc., C.A. No. 3601-CS (Del. Ch. April 18, 2013). This ruling explains both an issue about attorneys’ fees and the revision of a previous Chancery opinion in this case highlighted on these pages here.
Issue Addressed: The standard that applies to award fees pursuant to the terms of a contract, and the standard that will apply to a challenge regarding the amount of those attorneys’ fees awarded.
This relatively short decision provides a pithy summary of the standard that applies to (i) reviewing the fees awarded pursuant to fee shifting terms in an agreement which provides for fees be awarded to the prevailing party, and (ii) the basis for such an award of fees, and (iii) a challenge to the amount of fees.
One worthwhile aspect of this decision is the re-appearance of what has become known as Delaware’s “pizza principle” which, in essence, makes it very difficult to successfully challenge an award of fees in terms of the amount awarded, when the award is based on either a provision in a contract or a determination by the court that bad faith litigation tactics were employed. In connection with that discussion the court also addresses the relevant factors in Rule 1.5(a) of the Delaware Lawyers Rules of Professional Conduct.
Lastly, the court makes adjustments to the original opinion in this case that was highlighted on these pages at the link above.