But Federal Judge in Minnesota is Not a Happy Camper.
Half empty or half full?
“According to one very irate federal judge in Minnesota,” reports Dan Levine for The Recorder, “jailed plaintiffs lawyer William Lerach just helped his former colleagues lose about $45 million in fees.” Still, Coughlin Stoia Geller Rudman & Robbins did get a fee award of $65M.
The problem, according to U.S. District Judge James Rosenbaum, was that the “previous first-named partner neglected a significant obligation to the class: He failed to timely and fully inform the court of his role in the Milberg Weiss debacle.” The judge probably wouldn’t have appointed Lerach’s firm as lead counsel, had he known all the facts. But apparently the firm did a pretty good job after all, as the court approved a $925M settlement against UnitedHealth and former executives resulting from backdating of options. Coughlin Stoia name partner Patrick Coughlin explained that the government told Lerach that he was not a target, then changed its mind.
An interesting side point is that Coughlin Stoia asked the judge to defer to the firm’s deal with its lead plaintiff, because a report from a professor opined that the fee arrangement was reached in a free market. Said the judge:
“Seldom have the groves of academe and the ivory towers sheltered within their leafy bowers seemed farther from reality. A lecture on the virtues of the unrestrained free market sounds a bit hollow in light of the parties’, this Nation’s, and indeed the world’s, experience with the beauties of self-regulated financial markets during a period remarkably coterminous with the existence of this case.” Evidently, the judge and Gordon Gekko do not see eye-to-eye.