IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE ORCHARD ENTERPRISES, INC. 

STOCKHOLDER LITIGATION 

)

)

Consolidated 

C.A. No. 7840-VCL

MEMORANDUM OPINION

Date Submitted: June 30, 2014 

Date Decided: August 22, 2014

James R. Banko, FARUQI & FARUQI, LLP, Wilmington, Delaware; Samuel J. 

Lieberman, SADIS & GOLDBERG LLP, New York, New York; James S. Notis, 

Jennifer Sarnelli, GARDY & NOTIS, LLP, New York, New York; Attorneys for 

Plaintiffs.

William M. Lafferty, Jay N. Moffitt, Bradley D. Sorrels, Christopher P. Quinn, MORRIS, 

NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; Attorneys for 

Defendants Michael Donahue, David Altschul, Viet Dinh, Joel Straka, and Nathan Peck.

Philip Trainer, Jr., Toni-Ann Platia, ASHBY & GEDDES, P.A., Wilmington, Delaware; 

Kenneth J. Pfaehler, David I. Ackerman, DENTONS US LLP, Washington, District of 

Columbia; Attorneys for Defendants The Orchard Enterprises, Inc., Dimensional 

Associates, LLC, Daniel Stein, and Bradley Navin.

Ronald A. Brown, Jr., Marcus E. Montejo, PRICKETT, JONES & ELLIOTT, P.A., 

Wilmington, Delaware; Attorneys for Objectors Merlin Partners LP, Quadre 

Investments, LP, Matthew Giffuni, and Christopher Yeagley.

LASTER, Vice Chancellor.
1

The plaintiffs in this action filed suit on behalf of a class comprising the minority 

stockholders of The Orchard Enterprises, Inc. (―Orchard‖ or the ―Company‖). They 

challenged a cash-out merger between Orchard and its controlling stockholder 

Dimensional Associates, LLC (―Dimensional‖), which they claimed resulted from 

breaches of fiduciary duty by Dimensional and the members of Orchard‘s board of 

directors. The case settled for a payment by the defendants of $10,725,000 to the class. 

Stockholders who litigated an earlier appraisal proceeding to a final judgment 

objected to the settlement. They contended that their efforts contributed causally to the 

creation of the settlement fund and that they accordingly should be reimbursed for their 

counsel‘s fees and expenses.

On the facts presented here, the benefit conferred by the settlement resulted from 

serial contributions by the appraisal claimants and stockholder plaintiffs. Because the 

appraisal claimants were content to pursue only their own interests in the appraisal 

proceeding and did not undertake to serve the interests of the class as a whole, they lack 

standing to obtain a fee award. The stockholder plaintiffs in this action have standing to 

pursue a fee award, and their counsel is entitled to $2,250,000.

I. FACTUAL BACKGROUND

On July 29, 2010, Dimensional and Orchard effected a merger in which the shares 

of Orchard common stock, other than those held by Dimensional, were converted into the 

right to receive $2.05 per share (the ―Merger‖). At the time of the Merger, Dimensional 

and its affiliates held approximately 42% of Orchard‘s common stock and 99% of its 
2

Series A Convertible Preferred Stock. Through those holdings, Dimensional controlled 

approximately 53.3% of Orchard‘s outstanding voting power.

After the Merger closed, certain Orchard stockholders perfected their appraisal 

rights (the ―Appraisal Claimants‖). They hired lawyers (―Appraisal Counsel‖) and 

entered into engagement letters to govern the representation, including Appraisal 

Counsel‘s fees and expenses. Appraisal Counsel filed and litigated an appraisal 

proceeding on the Appraisal Claimants‘ behalf.

On March 3, 2012, while the appraisal proceeding was pending, Dimensional 

entered into an agreement with Sony Music that provided for a merger of Orchard with a 

Sony entity at a valuation materially higher than $2.05 per share (the ―Orchard/Sony 

Merger‖). Appraisal Counsel did not pursue discovery concerning the Orchard/Sony 

Merger. In July 2012, Chief Justice Strine, then Chancellor, determined that the fair 

value of Orchard‘s common stock at the time of the Merger was $4.67 per share. See In 

re Appraisal of Orchard Enters., Inc., 2012 WL 2923305 (Del. Ch. July 18, 2012), aff’d

sub nom. Orchard Enters., Inc. v. Merlin P’rs LP, 2013 WL 1282001 (Del. Mar. 28, 

2013) (TABLE).

Two months later, and over two years after the Merger closed, the plaintiffs filed 

this breach of fiduciary duty action (the ―Plenary Action‖). The plaintiffs retained 

different counsel to litigate their breach of fiduciary duty claims (―Plenary Counsel‖), 

although one of the law firms had played a role in the appraisal proceeding. The 

Appraisal Claimants and their counsel were aware of the Plenary Action, but they did not 
3

seek to intervene, whether to take over the litigation or to otherwise assist the class. They 

sat back and waited to see how the Plenary Action turned out.

After completing fact discovery, the parties to the Plenary Action filed cross 

motions for summary judgment. The plaintiffs sought determinations as a matter of law 

that the defendants had breached their duty of disclosure, that entire fairness was the 

operative standard of review, and that the Merger was not entirely fair. They also sought 

determinations as a matter of law that Dimensional and certain directors had breached 

their duty of loyalty and that judgment should be entered against them. The defendants 

resisted these determinations and sought rulings as a matter of law that the directors who 

served on a special committee were exculpated from liability and that neither rescissory 

damages nor quasi-appraisal were available remedies. The plaintiffs had named Orchard 

as a defendant, and Orchard argued that it could not be held liable for breach of fiduciary 

duty or for aiding and abetting.

The parties‘ cross motions were addressed in an opinion dated February 28, 2014. 

See In re Orchard Enters., Inc. S’holder Litig., 88 A.3d 1 (Del. Ch. 2014). The opinion 

denied the plaintiffs‘ motion except in two limited respects: (i) one of the claimed 

disclosure violations constituted a material misrepresentation as a matter of law, and (ii) 

the standard of review for trial would be entire fairness with the burden of persuasion on 

the defendants. The opinion also denied the defendants‘ motions except in two limited 

respects: (i) one of the allegedly misleading disclosure violations was factually accurate, 

and (ii) the plaintiffs could not hold Orchard liable on any of the theories asserted. 
4

On April 28, 2014, the parties filed a stipulation and agreement of settlement that 

resolved the Plenary Action in exchange for a payment by the defendants of $10,725,000. 

The stipulation called for the payment to be allocated across the entire class, including 

the Appraisal Claimants, so that all of the minority stockholders would receive a 

nominally equal amount for their shares. The stipulation contemplated that Plenary 

Counsel would apply for an award of attorneys‘ fees and expenses. It did not 

contemplate that Appraisal Counsel would make a fee application or that the Appraisal 

Claimants would be reimbursed for Appraisal Counsel‘s fees and expenses. 

The Appraisal Claimants objected to the allocation of the settlement consideration 

and the request for an award of attorneys‘ fees and expenses. The Appraisal Claimants 

maintained that their counsel‘s efforts contributed causally to the creation of the 

$10,725,000 fund and that accordingly they should be reimbursed for the fees and 

expenses that they incurred in the appraisal proceeding. The Appraisal Claimants 

advanced a related objection to the allocation of consideration in which they argued that 

if they had to bear counsels‘ fees, they would receive less consideration than the other 

minority stockholders on a net, per share basis.

After holding a fairness hearing on June 30, 2014, the court certified the class and 

approved the settlement. The court rejected the objection to the allocation of the 

settlement consideration, finding that an equal allocation was fair and that any 

functionally lesser share of the consideration to be received by the Appraisal Claimants 

would result from a decision on the award of attorneys‘ fees and expenses, not from the 
5

allocation of the settlement consideration. The court took the request for attorneys‘ fees 

and expenses under advisement. 

II. LEGAL ANALYSIS

― ̳It is beyond dispute that litigants in Delaware are generally responsible for 

paying their own counsel fees,‘ absent special circumstances or a contractual or statutory 

right to receive fees.‖ Scion Breckinridge Managing Member, LLC v. ASB Allegiance 

Real Estate Fund, 68 A.3d 665, 686 (Del. 2013) (quoting Burge v. Fid. Bond & Mortg. 

Co., 648 A.2d 414, 421 (Del. 1994)). ―It is also well established that a Chancellor or 

Vice Chancellor,  ̳under his equitable powers, has latitude to shift attorneys‘ fees.‘‖ Id.

(quoting Gatz Props., LLC v. Auriga Capital Corp., 59 A.3d 1206, 1222 (Del. 2012)).

Circumstances where a Vice Chancellor may use his equitable powers to 

award fees outside of an express statutory authorization or a contractual 

fee-shifting provision include, but are not limited to: (1) the presence of a 

common fund created for the benefit of others; (2) where the judge 

concludes a litigant brought a case in bad faith or through his bad faith 

conduct increased the litigation‘s cost; and (3) cases in which, although a 

defendant did not misuse the litigation process in any way, . . . the action 

giving rise to the suit involved bad faith, fraud, conduct that was totally 

unjustified, or the like and attorney‘s fees are considered an appropriate 

part of damages.

Id. at 686-87 (footnotes and internal quotation marks omitted). 

―Under the  ̳common benefit‘ exception [to the general rule that a party must pay 

its own counsel fees], a litigant may . . . receive an award of attorneys‘ fees if: (a) the 

action was meritorious at the time it was filed, (b) an ascertainable group received a 

substantial benefit, and (c) a causal connection existed between the litigation and the 

benefit.‖ Dover Historical Soc’y, Inc. v. City of Dover Planning Comm’n, 902 A.2d 
6

1084, 1089 (Del. 2006). When the benefit takes the form of a common fund, the 

―common fund‖ exception ―enables a litigant who succeeds in conferring a monetary 

benefit upon an ascertainable class of individuals to recover costs from the fund that he or 

she has created.‖ Id. at 1090. These fee-shifting doctrines are ―founded on the equitable 

principle that those who have profited from litigation should share its costs.‖ Goodrich v. 

E.F. Hutton Gp., Inc., 681 A.2d 1039, 1044 (Del. 1996). ―Otherwise,  ̳persons who 

obtain the benefit of a lawsuit without contributing to its cost [freeriders] are unjustly 

enriched at the successful litigant‘s expense.‘‖ Id. (alteration in original) (quoting Boeing 

Co. v. Van Gemert, 444 U.S. 472, 478 (1980)).

The power to award fees for a common fund or benefit ―is a flexible one based on

the historic power of the Court of Chancery to do equity in particular situations.‖ 

Tandycrafts, Inc. v. Initio P’rs, 562 A.2d 1162, 1166 (Del. 1989). The prerequisites to a 

fee award under these doctrines are necessary but not sufficient. Put differently, there are 

circumstances where a litigant will have filed a meritorious action and played a causal 

role in creating a benefit for a particular class, and yet still not be awarded fees and 

expenses for the effort. See, e.g., Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 

789 A.2d 1216, 1217 (Del. Ch. 2001) (denying fee award to hostile bidder whose 

litigation efforts otherwise met requirements for award under common benefit doctrine), 

aff’d sub nom. Mentor Graphics Corp. v. Shapiro, 818 A.2d 959 (Del. 2003); In re 

Dunkin’ Donuts S’holders Litig., 1990 WL 189120, at *1 (Del. Ch. Nov. 27, 1990) 

(same). When declining to award fees and expenses to a litigant who otherwise meets the 

requirements of the common benefit doctrine, Delaware courts have considered the 
7

potential for the litigant‘s interests to diverge from those of the class. See, e.g., Mentor 

Graphics, 789 A.2d at 1227; Dunkin’ Donuts, 1990 WL 189120, at *9. The decisions 

also have evaluated whether a fee award would serve public policy goals, such as 

incentivizing plaintiffs‘ counsel to police fiduciary wrongdoing. See, e.g., Mentor 

Graphics, 789 A.2d at 1230-31; Dunkin’ Donuts, 1990 WL 189120, at *10.

The controlling Delaware Supreme Court authority governing fee awards in 

common fund or benefit situations is Sugarland Industries, Inc. v. Thomas, 420 A.2d 142 

(Del. 1980). The Sugarland decision identifies factors for this court to consider when 

awarding fees and expenses for the creation of a common fund or benefit, including 

―whether the plaintiff can rightly receive all the credit for the benefit conferred or only a 

portion thereof.‖ In re Plains Res. Inc., 2005 WL 332811, at *3 (Del. Ch. Feb. 4, 2005); 

accord Allied Artists Pictures Corp. v. Baron, 413 A.2d 876, 878 (Del. 1980) (explaining 

that Delaware public policy is to compensate counsel ―for the beneficial results they 

produced‖ and requiring both a meritorious claim and ―a causal connection to the 

conferred benefit‖). In Sugarland, the Delaware Supreme Court relied on this factor to 

reduce an attorneys‘ fee award. The Court of Chancery had awarded the petitioners 20% 

of the benefit obtained in the form of a higher price for the corporation‘s property, but the 

Delaware Supreme Court held that the petitioners could not claim ―full credit‖ for the 

entire price increase. Id. at 151. The high court split the benefit into its component parts: 

the initial price increase and the later price increase. For the first, the Delaware Supreme 

Court agreed that the petitioners were responsible for 100% of the benefit and affirmed 

the 20% figure. Id. For the second, the Delaware Supreme Court noted that the higher 
8

price resulted from both the petitioners‘ efforts and from a competitive bidding process 

and market dynamics and held that the petitioners only should receive 5% of the later 

benefits. Id.

Sugarland did not break new ground by limiting a fee award in a shared-credit 

scenario to the benefits conferred by counsel seeking the award. See, e.g., Aaron v. 

Parsons, 139 A.2d 365, 367 (Del. Ch.) (―[C]ounsel for plaintiffs are entitled to be 

compensated for the part played by this suit insofar as it contributed to the benefits 

received by the corporation in the settlement.‖), aff’d, 144 A.2d 155 (Del. 1958). Since 

Sugarland, Delaware decisions consistently have recognized that multiple factors may 

contribute causally to the creation of a common fund or benefit. It may result from a 

combination of litigation effort by representative counsel and the operation of market 

forces.1 It may result from litigation counsel pressing claims in parallel with efforts by 

other corporate actors, such as a special transaction committee, special litigation 

committee, or other committee of independent directors.2 It may result from the 

 

1

See, e.g., Sugarland, 420 A.2d 142 (competitive bidder for assets); In re Compellent 

Techs., Inc. S’holder Litig., 2011 WL 6382523 (Del. Ch. Dec. 9, 2011) (potential competing

bidder for corporation); In re NCS Healthcare, Inc. S’holders Litig., 2003 WL 21384633 (Del. 

Ch. May 28, 2003) (topping bidder); Mentor Graphics, 789 A.2d 1217 (same); In re First 

Interstate Bancorp Consol. S’holder Litig., 756 A.2d 353 (Del. Ch. 1999) (same), aff’d sub nom. 

First Interstate Bancorp v. Williamson, 755 A.2d 388 (Del. 2000) (TABLE); United Vanguard 

Fund, Inc. v. TakeCare, Inc., 727 A.2d 844 (Del. Ch. 1998) (same); Dunkin’ Donuts, 1990 WL 

189120 (same); In re Anderson Clayton S’holders’ Litig., 1988 WL 97480 (Del. Ch. Sept. 19, 

1988) (Allen, C.) (same); In re Maxxam Gp., Inc. S’holders Litig., 1987 WL 10016 (Del. Ch. 

Apr. 16, 1987) (Allen, C.) (same). 

2

See, e.g., In re Quest Software Inc. S’holders Litig., 2013 WL 5978900 (Del. Ch. Nov. 

12, 2013) (special transaction committee); In re Emerson Radio S’holder Deriv. Litig., 2011 WL 

1135006 (Del. Ch. Mar. 28, 2011) (audit committee); In re Cox Radio, Inc. S’holders Litig., 
9

aggregated pressure of different teams of representative counsel litigating in different 

jurisdictions.3 It may result from a combination of efforts by representative counsel and 

other lawyers representing parties who did not sue in a representative capacity.4 In a 

dynamic and generative world filled with creative and resourceful litigants and lawyers, 

this list is not (and could never be) exhaustive. Whatever the scenario, plaintiffs‘ counsel 

only should receive fees for the portion of the benefit to which they causally contributed.

This case involves an obvious and self-pricing benefit: $10,725,000 in cash. Two 

causal factors contributed to the creation of the benefit: the appraisal proceeding and the 

Plenary Action. If the same counsel had litigated a combined appraisal proceeding and 

 

2010 WL 1806616 (Del. Ch. May 6, 2010) (special transaction committee), aff’d, 9 A.3d 475 

(Del. 2010) (TABLE); Brinckerhoff v. Tex. E. Prods. Pipeline Co., 986 A.2d 370 (Del. Ch. 2010) 

(same); In re Cox Commc’ns, Inc. S’holders Litig., 879 A.2d 604 (Del. Ch. 2005) (same); In re 

AXA Fin., Inc. S’holders Litig., 2002 WL 1283674 (Del. Ch. May 22, 2002) (same); Dow Jones 

& Co. v. Shields, 1992 WL 44907 (Del. Ch. Mar. 4, 1992) (same); Zlotnick v. Metex, Inc., 1989 

WL 150767 (Del. Ch. Nov. 14, 1989) (same); In re Josephson Int’l, Inc. S’holders Litig., 1988 

WL 112909 (Del. Ch. Oct. 19, 1988) (same); Fox v. Chase Manhattan Corp., 1986 WL 673 

(Del. Ch. Jan. 9, 1986) (special litigation committee); see also Franklin Balance Sheet Inv. Fund 

v. Crowley, 2007 WL 2495018 (Del. Ch. Aug. 30, 2007) (giving plaintiffs‘ counsel partial credit 

for filing derivative action that eventually led to controller‘s decision to effectuate a goingprivate transaction).

3

See, e.g., Alaska Elec. Pension Fund v. Brown, 988 A.2d 412, 418-19 (Del. 2010)

(evaluating causal roles of California action and Delaware action); In re Allion Healthcare Inc. 

S’holders Litig., 2011 WL 1135016, at *8 (Del. Ch. Mar. 29, 2011) (evaluating causal roles of 

New York action and Delaware action); In re Coleman Co. S’holders Litig., 750 A.2d 1202, 

1212-13 (Del. Ch. 1999) (reducing fee award for class counsel from 30% to 10% where counsel 

―largely piggy-backed‖ on settlement achieved by large stockholder); Mut. Shares Corp. v. Tex. 

Air Corp., 1987 WL 18105, at *3 (Del. Ch. Sept. 30, 1987) (awarding plaintiffs‘ counsel $3 

million where claimed benefit of $41 million was partly caused by the efforts of counsel in a 

parallel action who ―did all the considerable discovery and prepared exhaustive briefs‖).

4

See, e.g., Sutherland v. Sutherland, 2014 WL 3906500 (Del. Ch. July 31, 2014); Smith, 

Katzenstein & Jenkins LLP v. Fid. Mgmt. & Research Co., 2014 WL 1599935 (Del. Ch. Apr. 16, 

2014); Mentor Graphics, 789 A.2d 1217.
10

plenary action from start to finish, I would have no difficulty awarding fees and expenses 

for the aggregate effort in both proceedings based on the total benefit conferred.5 In this 

case, however, it is necessary first to determine how credit for the benefit should be 

allocated between the appraisal proceeding and the Plenary Action. Having done so, this 

decision awards $2,250,000 to Plenary Counsel for their role in creating the benefit. 

Because the Appraisal Claimants were content to pursue only their own interests and did 

not undertake to serve the interests of the class as a whole, they lack standing to obtain a 

fee award for Appraisal Counsel‘s role in creating the benefit.

A. The Allocation Of Causal Credit

The $10,725,000 benefit ultimately achieved in the Plenary Action resulted from 

the consecutive efforts of different litigants. For purposes of analysis, this decision 

breaks down the settlement consideration into two tranches: (i) an initial tranche 

attributable to the difference between the $2.05 deal price and the fair value of $4.67 per 

 

5

Surprisingly, there does not appear to be an extant decision that actually has done this, 

although that lacuna seems likely the product of limited research abilities and the potential for 

such awards to have been memorialized in secluded orders, rather than more easily located 

opinions. There are, however, Delaware decisions standing generally for the proposition that a 

court can award fees and expenses for multiple actions where they constituted parts of a single, 

unified campaign. See Garretson v. Garretson, 306 A.2d 737, 742 (Del. 1973) (finding the 

subsequent proceedings to be an extension of the earlier action and awarding attorneys‘ fees); 

Cohen v. Cohen, 269 A.2d 205, 207 (Del. 1970) (treating ―the three separate actions as in fact 

one continuous piece of litigation which ultimately resulted in a settlement of the differences of 

the parties‖ and affirming the award of ―fees based upon the entire scope of the litigation‖); 

Sutherland, 2014 WL 3906500, at *5 (treating litigation as a continuous whole and awarding 

fees when stockholder individually pursued a Section 220 action and then later brought fiduciary 

duty claims); Reis v. Hazelett Strip-Casting Corp., C.A. No. 3552–VCL, at 2 (Del. Ch. Feb. 22, 

2011) (ORDER) (awarding attorneys‘ fees and expenses that included expenses incurred in a

Vermont probate court action that led to the Delaware action).
11

share as determined in the appraisal proceeding and (ii) a second tranche for the 

consideration exceeding $4.67 per share.

The Appraisal Claimants contributed causally to the first tranche. In the appraisal 

proceeding, this court determined the going-concern value of Orchard and decided how 

that value should be allocated among the common and preferred stockholders given the 

preferred stock‘s stated liquidation preference of approximately $25 million. Appraisal 

of Orchard, 2012 WL 2923305, at *9. The court ruled that the fair value of Orchard‘s 

common stock at the time of the merger was $4.67 per share, more than double the 

merger consideration of $2.05 per share. Id. at *23. In the Plenary Action, plaintiffs‘ 

counsel benefitted from these rulings. They argued that collateral estoppel required the 

court to find quasi-appraisal damages based on the $4.67 per share appraisal valuation, 

and in the summary judgment opinion, this court noted that with respect to fair price, ―the 

appraisal decision‘s holding that the fair value of Orchard was $4.67, more than two 

times the merger price of $2.05, is certainly evidence of financial unfairness.‖ Orchard 

Enters., 88 A.3d at 30. This opinion further noted that if the plaintiffs succeeded in 

establishing liability, and if a quasi-appraisal damages remedy was awarded, then the 

amount of damages per share would be the difference between the $4.67 per share 

determination in the appraisal proceeding and the deal price. Id. at 48. 

By establishing that Orchard‘s fair value per share of common stock was $4.67, 

the Appraisal Claimants played a significant role in generating the benefits conferred by 

the settlement. Although this figure did not operate as a floor for the recovery in the 

Plenary Action, it raised the bar. The question is how much credit to give the Appraisal 
12

Claimants for the portion of the settlement consideration represented by the difference 

between $4.67 per share and $2.05 per share. 

In the two most common shared-credit scenarios—those involving topping bidders

or special committees—the actor not principally responsible for generating the benefit 

appears to have been credited with 20% to 25% of the benefit conferred.6 Because the 

application of the Sugarland factors is a discretionary exercise, the awards have a high 

degree of variability, and the rationales for the amounts are sometimes opaque. There is 

no science to fee awards, and even though the result is expressed as a number, the process 

does not lend itself to mathematical precision. The range of 20% to 25% is the best this 

court can do in an effort to follow precedent.

For purposes of the portion of the settlement consideration attributable to the 

difference between the $2.05 deal price and $4.67 per share, Plenary Counsel was the 

primary actor who obtained the value differential for the members of the class. From the 

standpoint of the class, Appraisal Counsel was a secondary actor: Appraisal Counsel 

 

6

 See, e.g., Cox Radio, 2010 WL 1806616 (awarding approximately 25% credit to 

secondary actor); In re Prodigy Commc’ns Corp. S’holders Litig., 2002 WL 1767543 (Del. Ch. 

July 26, 2002) (awarding approximately 20% credit to secondary actor); Zlotnick, 1989 WL 

150767 (awarding approximately 24% credit to secondary actor); Josephson, 1988 WL 112909 

(giving secondary actor credit for approximately 27% of the benefit conferred); see also

Sugarland, 420 A.2d at 151 (awarding counsel a fee of 5% of the incremental value achieved 

through a competitive bidding process where counsel obtained a preliminary injunction that led 

to the auction and a fee of 20% of the benefits solely attributable to plaintiffs‘ counsel, implying 

that counsel was credited with 25% of the benefit conferred by the incremental value achieved in 

the shared-credit phase); Franklin Balance Sheet, 2007 WL 2495018, at *13 (awarding counsel a 

fee of 15% of the initial $23.5 million in value, but only a fee of 5% of the remaining 

incremental benefit because plaintiffs‘ counsel were not the sole cause of the incremental benefit, 

implying that counsel was credited with 33% of the benefit achieved in the shared-credit phase).
13

played a contributory role, but without Plenary Counsel suing on behalf of the class, the 

other minority stockholders would have gotten nothing. By analogy to the bidder and 

special committee cases, Plenary Counsel receives credit for 80% of the benefit conferred 

on the other minority stockholders by the increase from $2.05 per share to $4.67 per 

share. The Appraisal Claimants receive credit for 20% of that benefit.

Plenary Counsel deserves sole credit for the second tranche of settlement 

consideration, which represents amounts in excess of $4.67 per share. They alone 

pursued a rescissory damages claim based on the Orchard/Sony Merger. The Appraisal 

Claimants did not seek discovery covering the time period when the Orchard/Sony 

Merger took place. They did not seek to intervene in the Plenary Action to take over the 

litigation or assist Plenary Counsel. The Appraisal Claimants chose to rely exclusively 

on Plenary Counsel to prosecute the fiduciary duty claims and obtain any amounts in 

excess of $4.67 per share. 

As of the date of the Merger, there were 6,378,252 shares of Orchard common 

stock outstanding. The defendants, who are excluded from the class, held 3,186,161 

shares. The Appraisal Claimants held 604,122 shares. The other minority stockholders 

held 2,587,969 shares. The increase from $2.05 per share to $4.67 per share therefore 

resulted in a total benefit to the other minority stockholders of $6,780,479. Plenary 

Counsel is responsible for 80% of this benefit, which equals $5,424,383. The Appraisal 

Claimants are responsible for 20% of this benefit, which equals $1,356,096. 

Subtracting the portion of the settlement consideration attributable to the increase 

from $2.05 per share to $4.67 per share leaves remaining consideration of $3,944,521. 
14

Of this amount, $357,036 went to the Appraisal Claimants, and $3,587,485 went to the 

other minority stockholders. Plenary Counsel is solely responsible for the entire amount.

In total, Plenary Counsel is responsible for conferring a benefit of $9,368,904. 

The Appraisal Claimants are responsible for conferring a benefit of $1,356,096. 

Although this decision expresses this amount in terms of specific dollar figures, readers 

should not be fooled by an illusion of false precision. At bottom, the amounts represent a 

discretionary allocation of causal credit for the settlement fund.

B. A Reasonable Fee Award For Plenary Counsel 

For the benefits conferred by the settlement, Plenary Counsel has requested an 

award of $3,250,000, inclusive of approximately $132,000 in litigation expenses and 

$12,500 in co-lead plaintiffs‘ awards. That amount represents roughly 30% of the total 

settlement consideration of $10,725,000. The figure rises to 35% of the $9,368,904 for 

which this decision gives Plenary Counsel causal credit. For conferring this benefit, this 

decision awards Plenary Counsel $2,250,000.

When awarding fees, the Court of Chancery ―must make an independent 

determination of reasonableness.‖ Goodrich, 681 A.2d at 1045-46. The court considers 

the factors laid out in Sugarland when determining the amount of a reasonable award. 

See Sugarland, 420 A.2d at 149-50. In Sugarland, the factors appear diffusely 

throughout the opinion. See id. The Delaware Supreme Court recently concisely 

summarized them as follows: ―1) the results achieved; 2) the time and effort of counsel; 

3) the relative complexities of the litigation; 4) any contingency factor; and 5) the 
15

standing and ability of counsel involved.‖ Ams. Mining Corp. v. Theriault, 51 A.3d 

1213, 1254 (Del. 2012). 

The Delaware Supreme Court noted in Americas Mining that ―Delaware courts 

have assigned the greatest weight to the benefit achieved in litigation.‖ Id. Later in that 

decision, the Delaware Supreme Court reiterated that ―our holding in Sugarland assigns 

the greatest weight to the benefit achieved in the litigation‖ and instructed that ―[w]hen 

the benefit is quantifiable, . . . Sugarland calls for an award of attorneys‘ fees based upon 

a percentage of the benefit.‖ Id. at 1259. After surveying a range of precedent, the 

Delaware Supreme Court observed that ―Delaware case law supports a wide range of 

reasonable percentages for attorneys‘ fees, but 33% is the very top of the range of 

percentages.‖ Id. (internal quotation marks omitted). The Delaware Supreme Court then 

provided guidance on how this court should approach the percentage-of-benefit analysis 

by noting with approval that this court ―has a history of awarding lower percentages of 

the benefit where cases have settled before trial‖ and grouping the percentages into 

categories based on the stage at which the litigation settled. Id. 

When a case settles early, the Court of Chancery tends to award 10-15% of 

the monetary benefit conferred. When a case settles after the plaintiffs have 

engaged in meaningful litigation efforts, typically including multiple 

depositions and some level of motion practice, fee awards in the Court of 

Chancery range from 15-25% of the monetary benefits conferred. . . . 

Higher percentages are warranted when cases progress to a post-trial 

adjudication.

Id. at 1259-60 (footnotes omitted). Selecting an appropriate percentage requires an 

exercise of judicial discretion. Id. at 1261.
16

The Plenary Action settled two months before trial. While there are outliers, a 

typical fee award for a case settling at this stage of the proceeding ranges from 22.5% to 

25% of the benefit conferred. An award amounting to 22.5% of the $9,368,904 benefit 

conferred equals approximately $2,108,000. An award amounting to 25% of the 

$9,368,904 benefit conferred equals approximately $2,342,000. An award of $2,250,000 

falls comfortably within this range.

Plenary Counsel asks for a higher proposed percentage of 30% by contending that 

the benefit obtained in this case is ―exceptional.‖ This is a recurring argument: Every 

plaintiffs‘ lawyer seeking fees seems to believe that the benefit he achieved is 

exceptional. That is understandable as a matter of human nature, and perhaps there will 

be an exceptional case someday that truly merits a substantial upward departure from the 

percentage awards suggested by precedent. But from a systemic standpoint, departures 

from the precedential ranges should be rare.

Using ranges of percentages that increase depending on the stage of the litigation, 

as described by the Delaware Supreme Court in Americas Mining, counteracts a natural 

human tendency towards risk aversion. Just as it is human nature to regard your personal 

accomplishments and performance as above-average (even exceptional), it is human 

nature to be risk-averse. For plaintiffs‘ counsel, risk aversion manifests itself as a natural 

tendency to favor an earlier bird-in-the-hand settlement that will ensure a fee, rather than 

pressing on for a potentially larger recovery for the class at the cost of greater investment 
17

and with the risk of no recovery.7 If counsel can take the lesser bird-in-the-hand and get 

a greater percentage from the court, then the incentive to press on is undermined. The 

reward for an exceptional result comes not from a special appeal for case-specific 

largesse, but rather from the percentage calculation itself. A percentage of a low or 

ordinary recovery will produce a low or ordinary fee; the same percentage of an 

exceptional recovery will produce an exceptional fee. See Ams. Mining, 51 A.3d at 1259 

(explaining that the ―common fund is itself the measure of success‖). The wealth 

proposition for plaintiffs‘ counsel is simple: If you want more for yourself, get more for 

those whom you represent. 

 

7

See Emerson Radio, 2011 WL 1135006, at *4 (―Awarding increasing percentages helps 

offset representative counsel‘s natural incentive to shirk.‖); see also John C. Coffee, Jr., 

Understanding the Plaintiff’s Attorney: The Implications of Economic Theory for Private 

Enforcement of Law Through Class and Derivative Actions, 86 Colum. L. Rev. 669, 690 (1986) 

(―[P]laintiff‘s attorneys have an incentive to settle prematurely and cheaply when they are 

compensated on the traditional percentage of the recovery basis.‖); Alon Harel & Alex Stein, 

Auctioning for Loyalty: Selection and Monitoring of Class Counsel, 22 Yale L. & Pol‘y Rev. 69, 

71 (2004) (―The class attorney‘s egoistic incentive is to maximize his or her fees—awarded by 

the court if the action succeeds—with a minimized time-and-effort investment. This objective 

does not align with a both zealous and time-consuming prosecution of the class action, aimed at 

maximizing the amount of recovery for the class members.‖). For now-classic treatments of this 

problem, see Kevin M. Clermont & John D. Currivan, Improving on the Contingent Fee, 63 

Cornell L. Rev. 529, 543-46 (1978); Geoffrey P. Miller, Some Agency Problems in Settlement, 

16 J. Legal Stud. 189, 198–202 (1987); and Murray L. Schwartz & Daniel J.B. Mitchell, An 

Economic Analysis of the Contingent Fee in Personal-Injury Litigation, 22 Stan. L. Rev. 1125, 

1133-39 (1970).
18

The other Sugarland factors support the reasonableness of a $2,250,000 fee. 

Plenary Counsel expended significant resources and effort prosecuting a complex case. 

They reviewed over 180,000 pages of documents, took or defended eight depositions, 

briefed and argued a motion to compel, briefed and argued a motion for summary 

judgment, and served opening and rebuttal expert reports. Their standing and ability are 

not challenged. Unlike the now-ubiquitous pre-closing expedited challenges to mergers 

that are routinely settled with supplemental disclosures, Plenary Counsel did not enter the 

case with a ready-made exit. Plenary Counsel faced risk in pursuing a damages remedy, 

including the realistic possibility that Plenary Counsel would receive nothing for their 

time and effort. 

Plenary Counsel report spending 3,197 hours. Unlike the hours claimed in many 

fee applications, this is not a facially excessive or preposterous figure. After netting out 

expenses of approximately $132,000 and co-lead plaintiffs‘ awards of $12,500, the fee 

award equates to an implied hourly rate of approximately $658.59. 

Fee awards . . . function as ex post judgments that will have the effect of 

either encouraging or discouraging future lawsuits. It will encourage them 

if it offers plaintiffs‘ lawyers the opportunity to make more money than 

they would make doing something else, that is, their lost opportunity cost. 

For most lawyers, opportunity costs are measured by their hourly rate. If 

the fee is large enough to cover both their lost opportunity costs and the 

risks associated with bringing the suit, as well as provide a premium, it 

should induce monitoring behavior. . . . Similarly, the greater the fee, 

without regard to the number of hours invested, the greater the incentive for 

lawyers to settle the lawsuit efficiently. . . . This Court has proceeded in 

the past on the unstated premise that awarding large fees will necessarily 

produce the incentives of encouraging meritorious suits and encouraging 

efficient litigation. But a point exists at which these incentives are 

produced, and anything above that point is a windfall.
19

Seinfeld v. Coker, 847 A.2d 330, 333-34 (Del. Ch. 2000). An effective hourly rate of 

$658.59 for the timekeepers in this action strikes me as a reasonable level of 

compensation for a case of this nature in this jurisdiction. It is above what I would expect 

the blended hourly rate to be for a team of partners, associates, and paralegals working on 

an hourly basis, and it therefore provides a premium to induce monitoring behavior and

compensate Plenary Counsel for their risk. At the same time, the level of compensation 

is not so high—again compared to lawyers in this jurisdiction working on a noncontingent hourly basis—as to represent an unwholesome windfall that would encourage 

the filing of non-meritorious and socially costly suits. 

C. No Fee Award For The Appraisal Claimants

The Appraisal Claimants seek an award of $767,445.58, representing 

reimbursement of attorneys‘ fees for Appraisal Counsel of $598,015.94 and expenses of 

$169,429.64 for the appraisal proceeding. At most, in my view, the Appraisal Claimants 

would be entitled to an award of $325,463.04. That figure takes the benefit of 

$1,356,096.00 that this decision has found to have resulted causally from the appraisal 

proceeding and awards the Appraisal Claimants the same percentage implied by the fee 

award to Plenary Counsel (24%). In my view, however, the Appraisal Claimants lack 

standing to recover any amount because they did not pursue a class-wide recovery on 

behalf of the other minority stockholders. They were content to serve themselves, and 

they should be left where they stand.

Not everyone who contributes to a benefit gets a fee award. The classic example 

is a hostile bidder who owns a toehold stake in the target corporation and pursues breach 
20

of fiduciary duty litigation against the target directors. Even when the bidder‘s litigation 

generates relief that contributes causally to the sale of the target corporation to a third 

party at a premium, thereby meeting the requirements for a fee award, the bidder lacks 

standing to recover its legal fees under a common fund or benefit theory. See Mentor 

Graphics, 789 A.2d at 1217; Dunkin’ Donuts, 1990 WL 189120, at *1. A stockholder 

plaintiff who monitors the bidder‘s litigation efforts is entitled to a fee award. See supra 

note 1 (collecting cases).

In denying standing to hostile bidders, Delaware decisions have identified two 

factors that override the bidder‘s prima facie showing of entitlement to a fee award: 

(i) the bidder‘s pursuit of personal interests potentially at odds with those of the class, and 

(ii) the absence of any need to incent a bidder to bring litigation to police fiduciary 

misconduct. On the first issue, ―bidders have economic interests that are inherently and 

structurally in conflict with the target company‘s stockholders‘ interest in receiving 

maximum available value.‖ Mentor Graphics, 789 A.2d at 1227. 

A bidder‘s objective is to identify an underpriced corporation and to 

acquire it at the lowest price possible. It is a straightforward investment 

decision. When the bidder, as in the typical situation, owes no direct duty 

to stockholders, it has no obvious reason to try to ―maximize shareholder 

value.‖ Indeed, its interest, if successful, will minimize shareholder value. 

Stockholders, on the other hand, do not care if the bidder gets a ―good 

deal,‖ they want the most compensation available for their holding in the 

company. 

Dunkin’ Donuts, 1990 WL 189120, at *9. 

On the second issue, there is no need to create an incentive for the bidder to file 

suit: ―[T]he opportunity to acquire control at a price acceptable to a bidder is itself the 
21

incentive for the bidder to absorb the cost of bringing the litigation.‖ Mentor Graphics, 

789 A.2d at 1231. 

In contrast, a stockholder-plaintiff who does not seek control will normally 

have no reason to incur litigation expenses that would far outstrip the 

benefit he or she would receive individually if the lawsuit were successful. 

Only by assuring such a shareholder plaintiff that if successful its expenses 

will be reimbursed by all the beneficiaries (the corporation or the 

shareholder class), would that shareholder have any incentive to bring the 

litigation.

Id. (emphasis added); accord Dunkin’ Donuts, 1990 WL 189120, at *10 (―Awarding 

litigants fees and expenses provides a needed incentive to shareholders to bring 

therapeutic action on behalf of a large and diffused class of shareholders who do not have 

the organizational ability or funds to seek redress themselves.‖). Unlike diffuse 

stockholders, bidders ―are not organizationally disadvantaged,‖ and ―the typical bidder is 

a well organized and well financed individual or small group of individual stockholders.‖ 

Dunkin’ Donuts, 1990 WL 189120, at *10. Bidders often ―have vast resources that may 

be tapped to fund lawsuits necessary to advance their investment strategy.‖ Id. ―[I]t 

strains reason to contend that bidders need the added incentive of fee shifting.‖ Id. 

For appraisal petitioners who do not seek also to represent a class, both of the 

policy rationales that caused this court to deny a hostile bidder standing to pursue a fee 

award are present, albeit in weaker form. Delaware Supreme Court precedent recognizes 

that an appraisal proceeding benefits only those stockholders who perfect their appraisal 

rights, not the stockholders more broadly. ―An appraisal proceeding is a limited 

legislative remedy intended to provide shareholders dissenting from a merger on grounds 

of inadequacy of the offering price with a judicial determination of the intrinsic worth 
22

(fair value) of their shareholdings.‖ Cede & Co. v. Technicolor, Inc. (Technicolor 

Plenary I), 542 A.2d 1182, 1186 (Del. 1988). By statute, only the stockholders who 

perfected their appraisal rights receive the appraisal award. See 8 Del. C. § 262(e). 

As with hostile bidders, the interests of appraisal claimants may diverge from 

those of the class. Appraisal claimants forgo the merger consideration, opting through 

the appraisal election to become unsecured creditors of the respondent corporation for the 

duration of the appraisal proceeding. As unsecured creditors, they may have interests 

that differ from those of stockholders who did not seek appraisal and who received the 

merger consideration, and those interests could cause counsel in the appraisal proceeding 

to make tactical or strategic choices that differ from what counsel would do if acting as a 

fiduciary for a broader class. The effect of capital lock-in may well be a net positive that, 

along with other features of appraisal, reduces agency costs when compared to traditional 

class actions and results in a more efficient corporation law. See Charles R. Korsmo & 

Minor Myers, Appraisal Arbitrage and the Future of Public Company M&A, 92 Wash. 

U. L. Rev. (forthcoming 2015), available at http://ssrn.com/abstract=2424935. This 

decision need not weigh in on that question. For present purposes, it is sufficient to note 

that, as with a hostile bidder, the interests of appraisal claimants can diverge from those 

of the class. 

Also like hostile bidders, stockholders who opt for appraisal have ample incentive

to bring the appraisal proceeding and absorb its cost. They do not need the prospect of 

fee awards to encourage them to pursue appraisal. To the extent some degree of costsharing mechanism might be desirable, the General Assembly has addressed the issue by 
23

including one in the appraisal statute. See 8 Del. C. § 262(j). Under this provision, the 

fees and costs incurred by one appraisal claimant to litigate the proceeding can be 

allocated pro rata among all stockholders who perfected their appraisal rights. Id.

Both factors that guided the outcomes in the hostile bidder cases thus cut against 

giving standing to an appraisal claimant to seek a fee award. The analysis changes if the 

appraisal claimant elects to represent a class, thereby permitting other stockholders to 

benefit directly from the appraisal claimant‘s investment in the proceeding and any 

resulting informational assets. The Delaware Supreme Court has recognized that an 

appraisal claimant‘s efforts can benefit other stockholders if the appraisal claimant seeks 

to represent other stockholders on a class-wide basis. In Technicolor Plenary I, the 

Delaware Supreme Court considered whether a stockholder who had elected appraisal 

should have standing to pursue a breach of fiduciary duty claim. 542 A.2d 1182. The 

Delaware Supreme Court held that standing existed, at least in part because of the ability 

of an appraisal petitioner to uncover corporate wrongdoing and then sue to benefit the 

stockholders as a class:

Experience has shown that the great majority of minority shareholders in a 

freeze-out merger accept the cash-out consideration, notwithstanding the 

possible existence of a claim of unfair dealing, due to the risks of litigation. 

With the majority of the minority shareholders tendering their shares, only 

shareholders pursuing discovery during an appraisal proceeding are likely 

to acquire the relevant information needed to pursue a fraud action if such 

information exists. Such shareholders, however, would not have any 

financial incentive to communicate their discovered claim of wrongdoing in 

the merger to the shareholders who tendered their shares for the 

consideration offered by the majority and, by tendering, have standing to 

file suit. Thus, to bar those seeking appraisal from asserting a laterdiscovered fraud claim may effectively immunize a controlling shareholder 

from answering to a fraud claim.
24

Id. at 1188-89 (citation omitted). 

In my view, if an appraisal claimant opts to represent a class and ultimately 

achieves class-wide benefits based in part on the appraisal action, then it is appropriate to 

treat the appraisal proceeding and the breach of fiduciary duty action as a single 

campaign for purposes of awarding fees to plaintiffs‘ counsel. See supra note 5. By 

contrast, if a stockholder and its counsel pursue appraisal, uncover information that could 

support class-wide relief, but do not pursue plenary litigation, then they have passed up 

an obvious opportunity to benefit their fellow stockholders in favor of keeping the 

benefits they have achieved for themselves. By analogy to the hostile bidder cases, the 

appraisal claimant who does not seek to represent a class lacks standing to seek a fee 

award for contributing to the benefit that a subsequent class action confers.

In other contexts, Delaware courts have applied similar principles to deny standing 

to plaintiffs who pursued personal agendas at odds with the interests of other 

stockholders. One informative precedent is Andra v. Blount, 772 A.2d 183 (Del. Ch. 

2000). There, Andra filed a lawsuit challenging a two-step, controlling-stockholder 

squeeze-out merger. She moved for expedited proceedings and sought a preliminary 

injunction on the theory that the first-step tender offer contained false and misleading 

disclosures, but then withdraw her injunction application and allowed the transaction to 

close without challenge. She declined to tender into the first-step tender offer, but other 

stockholders did, and the controller acquired sufficient shares in the tender offer to 

complete the second step via a short-form merger. Andra then perfected her appraisal 

rights and also resumed pursuit of her breach of fiduciary duty action. Chief Justice 
25

Strine, then a Vice Chancellor, held that Andra could pursue a claim for unfair dealing, 

but lacked standing to pursue a claim for breach of the duty of disclosure. Id. at 188-90. 

The Chief Justice explained that, given how she proceeded, Andra had not been injured 

by any alleged disclosure violations. Id. at 188. He noted that, had Andra chosen to

―actually press[] her preliminary injunction motion, perhaps it would be good policy to 

let her continue to litigate her disclosure-based claims, even though she decided not to 

tender.‖ Id. at 189-90. ―Andra, however, [stood] in a far different position. She had the 

opportunity to serve her fellow stockholders in that manner, but turned her back on it. 

Allowing her at this stage to press claims that do not involve injury to her would invite 

gamesmanship.‖ Id. Notably, Andra was denied standing to pursue her claims, a 

consequence arguably more significant than the denial of standing to pursue a fee award.

The Chief Justice ruled similarly as Chancellor in In re Aristotle Corp., 2012 WL 

70654 (Del. Ch. Jan. 10, 2012). There, two stockholders perfected their appraisal rights 

and pursued appraisal proceedings after a short-form merger. Five months before the 

scheduled trial in the appraisal proceeding, the stockholders filed a complaint for breach 

of fiduciary duty in which they claimed that the controlling stockholder of Aristotle 

Corporation and the members of its board of directors breached their fiduciary duties by 

not disclosing all material facts in connection with the short-form merger. As a remedy, 

they sought quasi-appraisal damages equal to the difference between the fair value of 

their shares and the price of the merger—precisely the same remedy available in the 

appraisal proceeding. Despite filing a plenary action, the plaintiffs sought ―to represent 

only themselves and not a class of other stockholders.‖ Id. at *1. 
26

Relying on Andra, the Chief Justice held that the plaintiffs lacked standing to 

pursue their breach of fiduciary duty claim:

When a litigant files a new claim that, if proven, would not entitle it to any 

relief that it does not already have a right to receive, that litigant in my view 

has no proper standing. The petitioners here were not deprived personally 

of any right to dissent by any of the alleged disclosure inadequacies; they 

dissented based on what they knew already. To put it simply, the alleged 

disclosure inadequacies did not in any way impair the petitioners‘ ability to 

seek appraisal, yet that is the theory on which they ground their claim. 

Thus, they would have this court issue a merely advisory ruling in a 

genuine sense . . . .

Id. at *3 (footnotes omitted). In reaching this conclusion, the Chief Justice twice 

reiterated that the plaintiffs had ―never sought to represent other investors.‖ Id. at *2; 

accord id. at *2 n.20 (―Importantly, here the petitioners did not plead this case as a class 

action and they do not seek to bestow the benefits of the successful prosecution of their 

claims on any shareholders other than themselves.‖). As in Andra, the plaintiffs were 

denied standing to pursue their claims, not just standing to pursue a fee award.

Most recently, in Crothall v. Zimmerman, 94 A.3d 733 (Del. 2014), the Delaware 

Supreme Court reversed a decision by this court awarding attorneys‘ fees to an individual 

litigant who pursued derivative claims on behalf of a limited liability company. After 

this court ruled in favor of the plaintiff, but before the parties could reach agreement on 

an appropriate form of final judgment, the plaintiff ―informed his counsel that he was 

abandoning the lawsuit and was no longer pursuing his claims.‖ Id. at *1. He then sold 

his LLC units, which ―deprived [him] of standing to continue in the fiduciary status he 

had undertaken as a derivative plaintiff.‖ Id. The case was dismissed for lack of 

standing, and no final judgment on the merits was ever entered from which the 
27

defendants could have appealed. Id. The plaintiff‘s counsel moved to intervene to 

pursue an application for attorneys‘ fees, which was granted, and this court subsequently 

awarded counsel fees in the amount of $300,000. On appeal, the Delaware Supreme 

Court reversed, holding that ―[a] plaintiff who generates a favorable trial court decision 

on a closely contested issue of corporate governance but then abandons his claim and 

renders the decision moot before it becomes final has not created a corporate benefit.‖ 

Id. at *3. What the plaintiff‘s litigation efforts instead enabled him to do was obtain a 

favorable personal settlement. See id. at *1 n.6. 

None of these decisions are directly on point. They nevertheless suggest, at least 

to me, that a court of equity can deny a plaintiff standing to receive a fee award, 

regardless of whether the plaintiff otherwise can establish a prima facie case supporting 

an award, if the plaintiff has proceeded in a manner designed to benefit the plaintiff 

individually—rather than the class as a whole—and any benefit achieved for the class has 

happened as an incidental by-product of the plaintiff‘s self-interested pursuit. Whether a

stockholder has filed an individual action or in a representative capacity is not 

dispositive. See Tandycrafts, 562 A.2d at 1167 (affirming award of fees to stockholder 

who pursued disclosure claim individually, rather than on a class basis, but obtained an 

injunction against a pending stockholder meeting, which benefitted all stockholders). 

The focus instead is on whether the plaintiff took steps to benefit other stockholders or 

the entity. Pursuing litigation on a representative basis provides strong evidence of such 

an intent, but it is not a requirement.
28

In this case, the Appraisal Claimants chose not to represent a class. They held a 

large stake in Orchard and did not need the incentive of a potential fee award to induce 

them to litigate the fair value of the common stock. Although discovery revealed 

information sufficient to support a breach of fiduciary duty action, they chose not to 

attempt to extend the benefits of their efforts to other stockholders. They were content 

with what they obtained for themselves. That was a perfectly acceptable choice, but it 

carries a consequence: Under the circumstances, the Appraisal Claimants and their 

counsel lack standing to obtain a fee award.

D. The Co-Lead Plaintiff Awards

The Appraisal Claimants object in passing to permitting Plenary Counsel to pay 

awards to the co-lead plaintiffs. Delaware decisions have approved similar awards under 

similar circumstances.8 The amounts are reasonable and will be paid out of Plenary 

Counsel‘s fee, so they do not harm the class. They have been fully disclosed and are not 

so large as to raise specters of conflicts of interest or improper lawyer-client

entanglements.

 

8

See, e.g., Forsythe v. ESC Fund Mgmt. Co. (U.S.), Inc., 2012 WL 1655538, at *8 (Del. 

Ch. May 9, 2012) (approving awards of $35,000, $20,000, and $7,500 for plaintiffs who gave 

depositions and other assistance); Brinckerhoff, 986 A.2d at 396 (approving payment of 

$100,000 to lead plaintiff who spent approximately 1,000 hours assisting with litigation); Oliver 

v. Boston Univ., 2009 WL 1515607, at *1 (Del. Ch. May 29, 2009) (awarding $40,000 to lead 

plaintiff where he spent approximately 2,000 hours assisting with litigation); Ryan v. Gifford, 

2009 WL 18143, at *14 (Del. Ch. Jan. 2, 2009) (approving award of $5,000 each to two 

plaintiffs); Raider v. Sunderland, 2006 WL 75310, at *2 (Del. Ch. Jan. 4, 2006) (noting 

Delaware courts‘ reluctance to grant awards but approving $42,000 for plaintiff who spent a total 

of 205 hours on litigation and incurred out-of-pocket expenses of $1,400).
29

III. CONCLUSION

Appraisal Counsel and Plenary Counsel each contributed causally, albeit to 

varying degrees, to a settlement that yielded $10,725,000 for Orchard‘s minority 

stockholders. The Appraisal Claimants lack standing to seek a fee award for Appraisal 

Counsel. Plenary Counsel is awarded $2,250,000 for their efforts. After conferring with 

the other parties and Appraisal Counsel, Plenary Counsel shall submit a form of order to 

implement the rulings in this opinion.