The biggest winners in the case against Tesla CEO Elon Musk and his pay package that was thrown out by a Delaware Chancery Court Judge will be the lawyers who tried and won the case.
In late January, we reported on Musk’s nearly $56 billion pay package that he earned by delivering on several tranches that were voted on and approved by shareholders in a proxy several years ago was thrown out by Judge Kathaleen McCormick.
Elon Musk’s Tesla pay package gets voided, Judge rules in favor of shareholder
The suit was brought on by shareholders, but they were represented by Bernstein Litowitz Berger & Grossmann. Now, those lawyers are set to receive a massive payday, according to a report from the Financial Times.
Lead Lawyer Greg Varallo said that it would be a few weeks before his side requested a fee for their services but did not comment on how much they could want.
Musk, who has been vocal about the controversy surrounding the case, seems baffled that the lawyers who tried the case and won could stand to walk away with millions:
So deeply and utterly wrong that a law firm that harmed Tesla could stand to gain billions
— Elon Musk (@elonmusk) February 4, 2024
In Delaware, lawyer fees are hotly contested because of their lucrative nature. More than 300 S&P 500 companies are registered in the state due to the numerous advantages that Delaware offers to corporations, including tax benefits and predictable outcomes in court cases.
However, the massive figures that can come with lawsuits featuring these companies can benefit the attorneys who are responsible for trying them, which is something that is spoken about frequently.
The Financial Times article states that judges awarded $267 million to lawyers representing shareholders who settled with Dell Technologies for $1 billion.
Elon Musk’s Delaware court decision labeled “unAmerican” by ARKInvest’s Cathie Wood
The fee has already made its way to the Delaware Supreme Court as funds that own VMware, which was a focus of the case against Dell due to a cash-and-stock merger, argued the amount is too big.
The report also said that the lawyers who tried the case “will probably make a somewhat more modest ask for optics reasons.”
Tesla shareholders have continued to support Musk in the debacle and are hoping to reverse the decision.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
