COURT OF CHANCERY
OF THE
STATE OF DELAWARE
LORI W. WILL LEONARD L. WILLIAMS JUSTICE CENTER VICE CHANCELLOR 500 N. KING STREET, SUITE 11400 WILMINGTON, DELAWARE 19801-3734
March 31, 2025
Gregory V. Varallo, Esquire Garrett B. Moritz, Esquire Andrew E. Blumberg, Esquire Adam D. Gold, Esquire Benjamin M. Potts, Esquire Thomas C. Mandracchia, Esquire Bernstein Litowitz Berger & Dylan T. Mockensturm, Esquire Grossmann LLP Ross Aronstam & Moritz LLP 500 Delaware Avenue, Suite 901 1313 North Market Street, Suite 1001 Wilmington, Delaware 19801 Wilmington, Delaware 19801
RE: In re Santander Consumer USA Holdings Inc. Stockholders’ Litigation, Consol. C.A. No. 2022-0689-LWW
Dear Counsel:
This action challenged the fairness of a 2022 buyout of a Santander
subsidiary’s public shares. The case settled on the eve of trial after years of hard-
fought litigation led by Elliott—a prominent investment management firm that held
a large stake in the subsidiary. I approved both the settlement, which secured $162.5
million for the stockholder class, and a fee award to the plaintiffs’ counsel out of
that amount. I took Elliott’s request for a $1.625 million incentive award under
advisement.
Elliott devoted extraordinary time and expertise to building, advancing, and
resolving the case, yielding a positive outcome for the class. But the bonus it seeks,
March 31, 2025 Page 2 of 18
which is 62.5% greater than the largest incentive award granted in Delaware, is
excessive. After considering the competing policy interests at play and precedent, I
conclude that $500,000 to be paid out of lead counsel’s fee award is appropriate.
I. BACKGROUND1
This case concerns a take-private transaction of Santander Consumer USA
Holdings, Inc. (“SCUSA”), a consumer auto financing company. In January 2022,
global financial institution Banco Santander, S.A. and its United States operating
subsidiary Santander Holdings USA, Inc. (“SHUSA”) purchased the public shares
of SCUSA for $41.50 per share. Before the buyout, SHUSA owned approximately
80% of SCUSA; the remaining 20% was publicly traded.2
Elliott, previously SCUSA’s largest minority stockholder, proceeded to
conduct a books and records investigation before filing a class action complaint.3 Its
suit was consolidated with another brought by a pension fund, and an amended
1 The factual discussion that follows is based on allegations in the Verified Amended Class Action Complaint and the background described in the plaintiffs’ settlement brief. See Verified Am. Class Action Compl. (Dkt. 141) (“Compl.”); Pls.’ Opening Br. in Supp. of the Proposed Settlement, Class Certification, Award of Att’ys’ Fees & Expenses & Incentive Award (Dkt. 203) (“Settlement Br.”). I have not made—and am not making— any findings of fact. 2 Compl. ¶¶ 1-5.
3 See Dkt 1; Compl. ¶ 53. I refer to co-lead plaintiffs Elliott International L.P. and The Liverpool Limited Partnership together as “Elliott.”
March 31, 2025 Page 3 of 18
complaint was filed.4 The co-lead plaintiffs challenged the fairness of the buyout,
which involved a two-step tender offer (with no minimum tender condition) and
merger under 8 Del. C. § 251(h).5 Elliott and its counsel theorized that Santander
insiders had unique knowledge that allowed them to time the buyout so that they
reaped billions of dollars in unique benefits.6
The parties prepared for trial through the summer of 2024. They were
“effectively trial ready” when, on September 9, 2024, they accepted a mediator’s
double-blind proposal to settle for $162.5 million.7
After providing notice to the class, the parties appeared at a December 17,
2024 settlement hearing. I approved the settlement as fair and reasonable.8
I approved lead counsel’s request for a fee and expense award of $26,631,143.34
from the settlement fund.9 I approved Elliott’s request for the reimbursement of its
expenses totaling $3.8 million—largely consisting of outside expert fees.10
4 Dkts. 19, 131, 141.
5 Compl. ¶ 4.
6 Id. ¶ 10.
7 Settlement Br. 2, 25-26.
8 Dkt. 211 (“Settlement Hr’g Tr.”) 43; see also Dkt. 210 ¶ 10.
9 Settlement Hr’g Tr. 40, 43.
10 Id. at 41; Settlement Br. 57.
March 31, 2025 Page 4 of 18
I approved the co-lead plaintiff’s request for a $5,000 incentive award.11 And I took
Elliott’s request for a $1,625,000 incentive award, which amounts to 1% of the
settlement fund, under advisement.12
II. ANALYSIS
Individual stockholders may bring representative litigation and pursue a
recovery on behalf of a stockholder class.13 “At the conclusion of a class action, the
class representatives are eligible for a special payment in recognition of their service
to the class.”14 This payment—called an “incentive award”—is in addition to the
representative plaintiff’s pro rata recovery as a class member. It is typically paid out
of class counsel’s own fee and expense award.15
A representative plaintiff takes on risks and burdens not shared with the absent
class members. To be an “adequate” representative, a plaintiff must maintain
oversight of class counsel and involvement with the case.16 She may face intrusive
11 Settlement Hr’g Tr. 43.
12 Id. at 42.
13 See Ct. Ch. R. 23(a) (“One or more members of a class may sue or be sued as representative parties on behalf of all members . . . .”). 14 5 William B. Rubenstein et al., Newberg and Rubenstein on Class Actions § 17:1 (6th ed. 2024). 15 See Chen v. Howard-Anderson, 2017 WL 2842185, at *2 (Del. Ch. June 30, 2017) (ORDER) (“[I]ncentive awards in Delaware are often authorized to be paid out of class counsel’s share of the recovery.” (citation omitted)). 16 Ct. Ch. R. 23(a)(4).
March 31, 2025 Page 5 of 18
discovery such as being deposed, having documents collected from personal devices,
or undergoing cross-examination at trial.17 If the case goes awry, she may risk
reputational harm—and even sanctions.
Incentive awards can encourage a plaintiff to step up as representative
plaintiffs and compensate them for “shouldering the extra burden in class action
litigation.”18 Without an award, the representative plaintiff may bear “certain costs
of continued litigation while receiving a disproportionately smaller pro-rata share of
the marginal benefit.”19 The incentive award is not only a rescissory measure, but
also serves as “an incentive to proceed with costly litigation (especially costly for an
actively participating plaintiff) with uncertain outcomes.”20
17 See e.g., Voigt v. Metcalf, C.A. No. 2018-0828-JTL, at 43-46 (Del. Ch. Feb. 2, 2022) (TRANSCRIPT) (describing the extensive and burdensome discovery taken against the plaintiff as a factor in determining the plaintiff’s incentive fee award). 18 Raider v. Sunderland, 2006 WL 75310, at *1 (Del. Ch. Jan. 4, 2006); see also Sullivan v. DB Invs., Inc., 667 F.3d 273, 333 n.65 (3d Cir. 2011) (“The purpose of these payments is to compensate named plaintiffs for the services they provided and the risks they incurred during the course of class action litigation and to reward the public service of contributing to the enforcement of mandatory laws.” (citation omitted)); Rubenstein, supra note 14, § 17:3 (explaining that incentive fees “aim to compensate class representatives for their service to the class and simultaneously serve to incentivize them to perform this function”). 19 Raider, 2006 WL 75310, at *1; see also In re Dell Techs. Inc. Class V S’holders Litig., 300 A.3d 679, 733 (Del. Ch. 2023) (“A representative plaintiff must devote time to the litigation, and if that time has to be offered gratis, then the representative plaintiff effectively pays for taking on the role of class representative. Rather than receiving the same amount as the class, the named plaintiff receives less.”), aff’d, 326 A.3d 686 (Del. 2024). 20 Raider, 2006 WL 75310, at *1.
March 31, 2025 Page 6 of 18
Despite these worthy goals, incentive awards are not without drawbacks.21
The promise of a bonus could be used to entice an indifferent stockholder to lend
her name and shares to a lawyer-driven lawsuit.22 An incentive award may create a
conflict between the interests of the class and those of the representative plaintiff.23
It could, for example, tempt a class representative to accept a result unfavorable to
the class if an incentive payment is offered.24 Or, a plaintiff might withhold consent
to “an optimal settlement in the hopes of achieving a larger settlement” with a larger
incentive fee.25
Given these competing interests, Delaware courts scrutinize incentive award
requests. The presumption is against any bonus payment to a representative plaintiff
21 See Isaacson v. Niedermayer, 200 A.3d 1205, 1205 n.1 (Del. 2018) (TABLE) (recognizing that “incentive fee awards may be problematic” in certain “circumstances”). 22 See In re Activision Blizzard, Inc. S’holder Litig., 124 A.3d 1025, 1077 (Del. Ch. 2015) (noting that large incentive awards may raise “the specter of . . . an improper lawyer-client entanglement”). 23 See Rubenstein, supra note 14, § 17:3 (“Incentive awards for class representatives seem problematic because they appear to treat the class representative differently than the other members of the class.”). 24 See Raider, 2006 WL 75310, at *1 (“[A] plaintiff's fiduciary obligations to the class could be compromised by the temptation of a quick settlement and a quick bonus payment.”); see also Weseley v. Spear, Leeds & Kellogg, 711 F. Supp. 713, 720 (E.D.N.Y. 1989) (“If class representatives expect routinely to receive special awards in addition to their share of the recovery, they may be tempted to accept suboptimal settlements at the expense of the class members whose interests they are appointed to guard.”). 25 Raider, 2006 WL 75310, at *1.
March 31, 2025 Page 7 of 18
who “did not undertake efforts above the baseline expected of litigants.”26 Nominal
incentive awards are occasionally justified by the policy of encouraging class
representatives to take on that role.27 More meaningful—though still modest—
payments have been awarded where the representative plaintiff has been subjected
26 Schumacher v. Loscalzo, 2023 WL 4842103, at *7 (Del. Ch. July 28, 2023) (declining to grant a request for a $1,500 incentive award (quoting Raider, 2006 WL 75310, at *2)); see also Morrison v. Berry, 2021 WL 2926138, at *2 (Del. Ch. July 12, 2021) (rejecting a request for a $5,000 incentive award paid from counsel’s fee award where the plaintiff’s service “was not of the type of those exemplary efforts of past class representatives who did earn a fee”); In re Fuqua Indus., Inc. S’holder Litig., 2006 WL 2640967, at *2 (Del. Ch. Sept. 7, 2006 (“In Delaware, representative plaintiffs typically receive no compensation for their services other than their pro-rata share of the class recovery and their reasonable out-of-pocket costs and expenses.”). 27 See, e.g., In re AMC Ent. Hldgs., Inc. S’holder Litig., 2023 WL 5165606, at *41 (Del. Ch. Aug. 11, 2023) (observing that in “typical baseline circumstances,” nominal incentive awards “reward[] competent participation”), aff’d sub nom. In re AMC Ent. Holdings, Inc., 319 A.3d 310 (Del. 2024); see also In re Galena Biopharma, Inc., Consol. C.A. No. 2017-0423-JTL, at 83-84 (Del. Ch. June 14, 2018) (TRANSCRIPT) (“[N]ominal awards are understandable and appropriate, given the current litigation environment in which there’s significant downside to serving as a named plaintiff.”); Spritzer v. Aklog, C.A. No. 2020-0935-KSJM, at 44 (Del. Ch. Nov. 3, 2022) (TRANSCRIPT) (awarding $2,000 and observing that nominal awards incentivize plaintiffs “to put their names on the papers”); Tylenda v. Calogero, C.A. No. 2023-1277-NAC, at 52-53 (Del. Ch. Jan. 23, 2025) (TRANSCRIPT) (awarding $1,000 where the plaintiff monitored and communicated with counsel because “signing up to be a representative plaintiff is not costless”); Theodore Eisenberg & Geoffrey P. Miller, Incentive Awards to Class Action Plaintiffs: An Empirical Study, 53 UCLA L. Rev. 1303, 1305 (2006) (describing the essential role of the named plaintiff in allowing class actions to be “effectively litigated”).
March 31, 2025 Page 8 of 18
to burdensome discovery.28 But substantial incentive awards are “rare” and awarded
only in “the exceptional case.”29
In Raider v. Sunderland, Chancellor Chandler outlined two factors that guide
the Court of Chancery’s discretion in assessing whether an incentive award should
be granted and the size of any such award.30 He explained that the court should
consider whether the class representative (1) expended “a significant amount of time,
effort and expertise” on the case, and (2) obtained “a significant benefit [for] the
28 See, e.g., Riche v. Pappas, C.A. No. 2018-0177-JTL, at 26 (Del. Ch. Sept. 16, 2020) (TRANSCRIPT) (approving a $7,500 incentive award where the plaintiff was deposed and involved in an in-person mediation and trial preparations); Buttonwood Tree Value P’rs, L.P. v. R.L. Polk & Co., Inc., C.A. No. 9250-VCG, at 35-36 (Del. Ch. Oct. 14, 2024) (TRANSCRIPT) (approving a request for a $5,000 incentive fee where the plaintiff “faciliat[ed] discovery by providing documents and attending depositions,” was involved in a decade-long lawsuit, and “participated” in a mediation session); In re Warner Bros. Discovery, Inc. S’holder Litig., C.A. No. 2022-1114-JTL, at 15 (Del. Ch. Oct. 10, 2024) (TRANSCRIPT) (awarding $5,000 to a named plaintiff who responded to written and document discovery and noting that the award was a “modest offset” to “address what would otherwise be a detriment” to the plaintiff, who “effectively received less than the remainder of the class by providing their services”); Diep v. Sather, C.A. No. 12760-CM, at 19-20 (Del. Ch. Sept. 10, 2021) (TRANSCRIPT) (granting a request for a $5,000 incentive fee where the representative plaintiff traveled cross-country for a deposition, losing three days of work). 29 Oliver v. Boston Univ., 2009 WL 1515607, at *1 (Del. Ch. May 29, 2000); see also Raider, 2006 WL 75310, at *1; In re Pattern Energy Grp. Inc. S’holder Litig., C.A. No. 2020-0357-MTZ, at 34 (Del. Ch. May 3, 2024) (TRANSCRIPT) (approving $25,000 incentive awards for two named plaintiffs who were the subjects of extensive discovery including multiple depositions and were closely involved in the case and observing that the awards were “unusual” awards for “unusual facts”). 30 2006 WL 75310, at *1.
March 31, 2025 Page 9 of 18
class.”31 The Delaware Supreme Court has encouraged the Court of Chancery to
conduct a “careful review” of these factors “before making incentive fee awards.”32
An application of the Raider factors indicates that Elliott’s exceptional work
merits an equally exceptional award—albeit one less than Elliott seeks. Elliott’s ask
well exceeds that awarded by any Delaware court, and precedent suggests that it is
too high. An incentive award of $500,000 is appropriate.
A. Elliott’s Contributions to the Class
Elliott contributed “a significant amount of time, effort, and expertise” to the
case.33 These contributions were essential in securing a meaningful financial benefit
for the class.
Elliott estimates that it spent 1,630 hours on this matter over about two and a
half years.34 Its work at every stage of the case drastically exceeded that typical of
a representative plaintiff. Elliott spearheaded efforts during the pre-complaint
investigation, fact and expert discovery, trial preparations, and settlement
negotiations.35
31 Id.
32 Isaacson, 200 A.3d at 1205 n.1 (citing Raider, 2006 WL 75310, at *2).
33 Raider, 2006 WL 75310, at *2.
34 Decl. of Gaurav Toshniwal ¶ 38 (Dkt. 203) (“Toshniwal Decl.”); see Settlement Br. 2.
35 Toshniwal Decl. ¶¶ 6-35.
March 31, 2025 Page 10 of 18
At the outset, Elliott’s hundreds of hours of investigatory and valuation work
prompted it to contact counsel to pursue a challenge to the buyout.36 It worked
closely with counsel to prepare the original complaint, spending 100 hours on that
task alone.37 It assisted in preparing an amended complaint, a novel spoliation
motion, a pre-trial brief, and in setting trial strategy. These pretrial efforts totaled
over 240 hours.38
Elliott was similarly immersed in offensive and defensive discovery. It
invested 380 hours in fact discovery, including 160 hours reviewing and analyzing
documents produced to it.39 It produced over 3,000 documents in response to 27
requests for production and responded to 34 interrogatories.40 An Elliott portfolio
manager prepared and sat for an 11-hour deposition as Rule 30(b)(6) witness.41
Elliott also invested 320 hours in expert discovery.42
36 Id. ¶¶ 7, 11-12; see also id. ¶ 8 (stating that Elliott’s early valuation work took “over 250 hours”). 37 Id. ¶¶ 13-14.
38 Id. ¶ 35.
39 Id. ¶¶ 17, 20, 24.
40 Id. ¶ 22.
41 Id. ¶ 23.
42 Id. ¶ 29.
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Throughout the matter, Elliott supplied financial and valuation expertise.43 Its
team included multiple technically proficient investment professionals.44 It
remained deeply involved through settlement negotiations, devoting more than 210
hours to resolving the case in a way benefitting the class.45 Lead counsel confirmed
the significance of Elliott’s contribution, stating that it “made [their] jobs easier and
made the outcome better.”46
Elliott’s time, effort, and expertise generated value for the class. The $162.5
million settlement is the second largest class settlement in Court of Chancery
history.47 It represents a 6.5% premium to the deal price—a significant increase.48
Elliott’s efforts and valuation expertise meaningfully contributed to this result.49
43 Cf. Morrison, 2021 WL 2926138, at *1 (citing instances where expertise in tax, financial, and trusts supported incentive awards). 44 Toshniwal Decl. ¶ 4.
45 Id. ¶¶ 36-37.
46 Settlement Hr’g Tr. 29; see also Chen, 2017 WL 2842185, at *4 (considering lead counsel’s position on an incentive award request “because the lawyers have worked directly with the named plaintiff and are generally better positioned to evaluate the named plaintiff’s contribution” than the court). 47 This data point was offered by lead counsel. See Settlement Br. 1. I have not independently confirmed it. 48 Settlement Hr’g Tr. 20. Lead counsel represents that 6.5% premium achieved is the largest ever in a Delaware M&A class settlement above $75 million. Id.; Settlement Br. 43-44. 49 See Raider, 2006 WL 75310, at *2 (explaining that the court “notably ignore[s] the benefit to the class” in setting an incentive award and looks to the effort and expertise
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B. Comparison to Precedent
Generally, representative plaintiffs have limited involvement in a suit. The
“baseline” expectation is that the plaintiff reviews the pleadings she is asked to sign,
engages with counsel, and agrees to any settlement.50 These efforts do not
automatically entitle the plaintiff to a bonus; the starting presumption is the
opposite.51 If any incentive award is granted, it is a nominal one.52
There are outlier cases, however. On rare occasion, a representative plaintiff
will devote extraordinary time and expertise to a case that profoundly contributes to
value creation for a stockholder class or nominal defendant. The Court of Chancery
is willing to grant greater incentive awards in those unusual cases.53
devoted); see also Chen, 2017 WL 2842185, at *4; supra notes 34-46 and accompanying text (describing Elliott’s work on the case). 50 Schumacher, 2023 WL 4842103, at *7 (denying a nominal incentive award where the plaintiff reviewed pleadings, spoke with his counsel, and approved a settlement). 51 See Morrison, 2021 WL 2926138, at *2; see supra note 26 and accompanying text.
52 See supra note 27 and accompanying text.
53 See Raider, 2006 WL 75310, at *2; Forsythe v. ESC Fund Mgmt. Co. (U.S.), 2012 WL 1655538, at *8 (Del. Ch. May 9, 2012) (approving awards of $35,000 and $20,000 for plaintiffs who made “substantial contributions to the case”); Activision Blizzard, 124 A.3d at 1077 (awarding $50,000 where the lead plaintiff “participated meaningfully in the case” in addition to being subjected to “vigorous attacks” during litigation); Brinckerhoff v. Texas E. Prods. Pipeline Co., 986 A.2d 370, 396 (Del. Ch. Jan. 15, 2010) (awarding a $100,000 fee to the lead plaintiff out of his counsel’s award where the plaintiff “spent approximately 1,000 hours assisting on the litigation”).
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In Raider, the court approved a “bonus payment” of $41,000 to the lead
plaintiff in recognition of his efforts in support of a $15 million cash recovery for
the class.54 Lead plaintiff Raider dedicated 200 hours to the case—reviewing
documents, communicating with class counsel, providing analysis, and negotiating
the class settlement.55 He also supplied unique knowledge as an attorney,
accountant, and manager that gave him a “leading role” in the case.56 Raider’s
expertise played a particularly critical role in negotiations and settlement
discussions, which increased the settlement amount by a third.57
A bonus of a similar size was awarded in Oliver v. Boston University.58 There,
the lead plaintiff spent 2,000 hours on a class action suit.59 He “was deposed
extensively, attended each day of trial, and . . . interacted extensively with
counsel.”60 He also “helped with document review and recognized an important
document from a large set of documents produced that played a key role in
54 Raider, 2006 WL 75310, at *2.
55 Id.
56 Id.
57 Id.
58 2009 WL 1515607, at *1.
59 Id.
60 Id.
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supporting the class recovery.”61 Oliver’s expertise as a trust officer furthered the
beneficial outcome for the class.62 Although Oliver sought an award of $50,000, the
court granted him $40,000 as “reasonable compensation for his efforts” toward a
classwide recovery of $2,837,454.63
An incentive award of greater scale was granted in In re El Paso Pipeline
Partners, LP.64 There, the named plaintiff in a derivative suit sought an incentive
award of $1.35 million after the court awarded damages of nearly $171 million.65
The plaintiff purportedly “discovered the alleged wrongdoing.”66 He invested 1,500
hours on the matter over a period of five years and ten months.67 His “expert
knowledge of the MLP industry and highly informed opinions and insight” as a
former investment banker “were essential to counsel” at all stages of the case.68 The
61 Id.
62 Id.
63 Id. at *1-2.
64 2016 WL 451320, at *2 (Del. Ch. Feb. 4, 2016) (ORDER), vacated on other grounds sub nom. El Paso Pipeline GP Co. v. Brinckerhoff, 152 A.3d 1248 (Del. 2016). 65 See Pl.’s Br. in Supp. of His Appl. for Att’ys’ Fees and Reimbursement of Expenses, In re El Paso Pipeline P’rs, LP Deriv. Litig., C.A. No. 7141-VCL, at 10 n.3, 16 (Del. Ch. Jan. 8, 2016) (Dkt. 251). 66 Id. at 16.
67 Aff. of Peter Brinckerhoff, El Paso, C.A. No. 7141-VCL (Dkt. 253).
68 See id.; Pl.’s Br. in Supp. of His Appl. for Att’ys’ Fees and Reimbursement of Expenses, El Paso, C.A. No. 7141-VCL, at 16 (Dkt. 251).
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court awarded him $450,000—a third of what he sought—out of the plaintiff’s
counsel’s fee award.69
An incentive award of $1,000,000—the largest in Delaware—was granted in
Chen v. Howard-Anderson.70 The named plaintiff “effectively acted as a second
attorney,” devoting 4,000 hours to the case. He spent hundreds of hours reviewing
documents, attending depositions, researching and preparing memoranda, and
actively participating in settlement negotiations.71 Chen also supplied his expertise
as a professional investor to address questions of valuation and assist class counsel.72
He developed key litigation strategies, including preparing the first draft of a
“detailed, high-quality” 130-page amended complaint.73 His efforts contributed to
the $35 million recovery.74
Most notably, Chen’s involvement led to negative personal consequences.
Discovery was used to cast allegations of misconduct against Chen, sanctions were
sought against him, and a costly investigation by the Securities and Exchange
Commission ensued. Although he eventually received a no action letter from the
69 El Paso, 2016 WL 451320, at *2.
70 2017 WL 2842185, at *6.
71 Id. at *4.
72 Id.
73 Id. at *5.
74 Id. at *3.
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SEC, negative press on the matter effectively ended Chen’s career on Wall Street.75
Lead Delaware counsel recommended an incentive award of $1,000,000 for Chen;
the court adopted that estimate.76
This is not an exhaustive study of every noteworthy incentive award in
Delaware, but it supplies a rough scale to gauge Elliott’s entitlement here.
The time Elliott devoted to this case well exceeds that of the plaintiff in
Raider, but it is thousands of hours less than those devoted in Chen. Its participation
is closer to that of the plaintiffs in Oliver and El Paso. Substantively, Elliott’s
expertise seemingly played a greater role than that of the plaintiff in Oliver; in that
respect, it is more like El Paso and Chen where the plaintiffs were investment
professionals (though neither was an institution like Elliott).
Elliott did not, however, incur the sort of personal harm that the plaintiff in
Chen suffered due to his involvement in the case.77 The risks Elliott faced are in line
75 Id. at *5-6. Risk exposure also justified a $50,000 incentive award in Dell Technologies, which the court described as “modest, given the time and effort . . . expended.” 300 A.3d at 734. There, the lead plaintiff was subjected to a “scorched earth strategy” of aggressive discovery through which the defendants attempted to turn up evidence of wrongdoing. Id. The court found that the discovery demands not only caused the plaintiff pension fund to expend significant time and effort but also subjected it to reputational risk. Id.; cf. Fox v. CDX Hldgs., Inc., 2015 WL 5163790, at *1 (Del. Ch. Sep. 02, 2015) (ORDER) (granting an incentive payment of $100,000, “greater than what this court typically authorizes,” because the representative plaintiff “risked his employment”). 76 Chen, 2016 WL 451320, at *6.
77 See supra note 76 and accompanying text.
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with how its core business operates.78 It incurred opportunity costs by investing the
time of its professionals and fronting millions of dollars of expenses. Doing so paid
off. As the largest minority stockholder in SCUSA, it recovered almost one-third of
the settlement fund and its expenses were repaid in full.79
These facts indicate that an incentive award at the top of the scale—the
$1 million granted in Chen—is unwarranted. A bonus like those in Raider or Oliver,
though, is not enough in view of Elliott’s major contributions to an excellent result.
El Paso is the best benchmark. The benefit recovered is comparable ($135 million
there versus $162.5 million here). So are the hours supplied (1,500 hours there
versus 1,630 here). The plaintiffs in El Paso similarly supplied technical expertise.
* * *
After considering the Raider factors, policy interests, and precedent, I
conclude that an incentive award of $500,000 is appropriate. This payment, on top
of Elliott’s pro rata recovery and the reimbursement of its expenses, will compensate
it for the burdens it took on that are not shared with other class members. It will also
78 Unlike individual plaintiffs in the precedent described above, Elliott approached the associated risks with the resources and leverage of a massive institution. Its exposure to risk is not comparable to the individual who puts her employment and personal reputation on the line to represent the class. 79 Settlement Br. 45; Settlement Hr’g Tr. 41-42; see also Compl. ¶ 53.
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reward Elliott for its extraordinary contributions to the case. The settlement would
not exist without Elliott finding, litigating, and resolving the matter.
III. CONCLUSION
Elliott is awarded an incentive fee of $500,000. The award will be paid from
lead counsel’s fee award. IT IS SO ORDERED.
Sincerely yours,
/s/ Lori W. Will Lori W. Will Vice Chancellor
cc: Kimberly A. Evans, Esquire Lindsay K. Faccenda, Esquire Robert Erikson, Esquire