The legal team that argued against Tesla's CEO of Elon Musk record high paid packages now wants to be paid – a record $7.3 billion legal fees.
HAD 37 attorneys, associates and paralegals assisting in the representation of Richard Tornetta, a Tesla shareholder who ignorant electric vehicle maker over Musk's proposed $56 billion payday. Tornetta won in Delaware court in January, with Delaware Judge Kathaleen McCormick throwing out the compensation package.
In response, Tesla held another shareholder vote in June and argued that Musk's compensation was “not for the money” but rather to keep his attention on the company.
The shareholders finally voted in favour of the compensation plan and a supplemental resolution to move Tesla's legal headquarters from Delaware to Texas.
On Monday, McCormick heard from Tornetta's and Tesla's legal teams on the legal fee request.
Tornetta's lawyers presented arguments and expert testimony to show why they deserved $7.3 billion in legal fees, made up entirely of Tesla stock. At Monday's share price, the fee works out to about $370,000 for each hour of work.
Their justification was similar to what Tesla gave for Musk's salary: It's not just about the money, it's about incentives for future behavior.
“If Delaware continues to perceive value in policing misconduct, then narrowing the incentives (for attorneys) would be a very bad idea,” Bernstein Litowitz Berger & Grossman partner Greg Varallo said.
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The lawyers said that instead of recovering the usual 33% fee that Delaware allows, they are seeking a smaller 11% of the Tesla stock that would have gone to Musk — if the judge hadn't thrown out Musk's salary. his. They said they wanted “a piece of the value pie” they “created”.
“We fought with the best,” Varallo said. “Litigation against Tesla is never easy. There are companies that play by the rules every day, and then there are companies like Tesla.”
Tesla attorney John Reed told McCormick that the fee request “looks like a real lawyer joke.”
Elon Musk. (Photo by Scott Olson/Getty Images)
Reed said the January decision sent Tesla shares tumbling and cast doubt on Musk's future at the EV maker. Although Tesla's stock fell after January, the electric vehicle maker is up overall since January at the time of writing.
Reed requested that Tornetta's attorneys receive a fee of $13.6 million.
Court documents show that more than 8,000 Tesla shareholders have sent letters and objections to the court over the legal fees.
If approved, the legal fee would be the highest in the history of corporate America, more than that 688 million dollars given in an Enron class action in 2008.
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