Lead attorneys representing plaintiffs who made claims against investment funds that were manipulated by Bernie Madoff will get $19.9 million for their services.
The attorneys negotiated a settlement fund for the plaintiffs, which is expected to hold $1.45 billion.
The district court awarded the lead attorneys fees equal to the lesser of 3 percent of the fund, or their lodestar amount—the number of hours worked multiplied by a reasonable hourly rate—multiplied by 2.5. The U.S. Court of Appeals for the Second Circuit said the 2.5 multiplier was excessive.
On remand, the lead attorneys calculated their lodestar amount to be $19.9 million, but asked for $33.2 million, which was 3 percent of the fund or 1.67 times the lodestar amount.
But the lead attorneys weren’t at risk of not getting paid, and therefore weren’t entitled to the 3 percent fee or use of a lodestar multiplier, the opinion by Judge Gabriel W. Gorenstein said.
Even if all the other factors related to using a lodestar multiplier favored the lead attorneys, the lack of risk strongly favored not using a multiplier, the court said.
The case is In re Tremont Sec. Law, State Law & Ins. Litig., 2019 BL 44427, S.D.N.Y., No. 08 Civ. 11117 (CM) (GWG), 2/11/19.