WILMINGTON, Del. — Class attorneys who helped secure an $80.8 million increase in proceeds from Sculptor Capital Management's sale to Rithm Capital Corp. saw their fee proposal slashed from $5.75 million to $3.6 million by Delaware's Court of Chancery on Friday. Vice Chancellor Sam Glasscock III's decision concludes a nearly year-long legal battle over the sale, which had been marred by allegations of disclosure failures and favoritism towards Rithm.
Background of the Case
The dispute arose from concerns that Sculptor's board members had dismissed a higher bid from a consortium led by Saba Capital Management LP and its founder, Boaz Weinstein, in favor of a lower offer from Rithm. As the sale process unfolded, the final per-share value increased from $11.15 to $12.70, largely due to pressures from ongoing litigation. The class attorneys sought compensation for their role in securing this improvement.
Court's Decision on Attorney Fees
Vice Chancellor Glasscock acknowledged the complexity of the case but determined that the class attorneys' efforts contributed only 12% to the final transaction price increase. He awarded $1,939,200 for their work in securing an extra $1.55 per share, a significant reduction from the $4 million minimum they had requested. The court noted that most of the price increase occurred before the lawsuit was expedited or significant documents were disclosed.
The vice chancellor also pointed out that negotiations by Sculptor's founder Daniel S. Och and other original officers played a significant role in achieving the final price increase, reducing the compensable impact of the class attorneys' litigation.
The class attorneys were represented by a team from Labaton Sucharow LLP, Friedman Oster & Tejtel PLLC, Christensen & Dougherty LLP, Kaskela Law LLC, and Saxena White PA. Sculptor Capital Management and its directors were represented by Richards Layton & Finger PA and Quinn Emanuel Urquhart & Sullivan LLP. The founder group was represented by Abrams & Baylis LLP and Dechert LLP, while Rithm was represented by Skadden Arps Slate Meagher & Flom LLP.
The case, Gilles Beauchemin v. Marcy Engel et al., case number 2023-0921, was heard in the Court of Chancery of the State of Delaware.
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