In the recent opinion of In re Activision Blizzard, Inc. Stockholder Litigation, Cons. C.A. No. 8885-VCL (Del. Ch. May 20, 2015), the Court approved the highest settlement reached in a derivative action to date, in the amount of $275 million. Through the opinion, lead counsel was granted an amount of $72.5 million in fees and expenses.
To summarize, the lead plaintiff Anthony Pacchia and his attorneys challenged a transaction in which Vivendi S.A. divested its controlling equity position in Activision Blizzard, Inc. On the eve of trial, the parties entered into a settlement by which defendants agreed to (i) pay $275 million to Activision, (ii) reduce a cap on the voting power of Activision’s two senior officers from 24.5% to 19.9%, and (iii) expand Activision’s board to include two additional independent directors.
The Court analyzed the fees awarded to lead counsel using the well-known Sugarland factors and the common benefit doctrine. While the Court found that the $72.5 million awarded to lead counsel “implies a generous hourly rate”, the Court also found that it was justified by their efforts, noting that “few litigation teams could have achieved this result” against their adversaries.