Attorneys' Fees Awarded In Disclosure Only Settlement

In the case of In re: Paetec Holding Corp. Shareholders Litigation, C.A. No. 6771-VCG (Del. Ch. Mar. 19, 2013), the Court of Chancery awarded attorneys' fees in the amount of $500,000 in connection with a settlement of a challenge to a merger resulting in additional disclosures prior to the closing of such deal.

Of note, the Court made clear that despite the fact that the fee request was unopposed, the Court still must engage in close judicial scrutiny of the requested fees.  The Court reviewed the fee request under the "common benefit" doctrine, and determined that fees were warranted in this situation.  Specifically, the Court indicated that the standard by which it examines the appropriate amount of attorneys' fees was set forth by the Delaware Supreme Court in Sugarland Industries, Inc. v. Thomas, 420 A.2d 142 (Del. 1980). The relevant factors are: