In a significant ruling, a Delaware vice chancellor has reduced an objector’s counsel fee and expense request from $517,000 to $50,000 as part of a derivative suit settlement involving Goldman Sachs directors. The court also awarded plaintiffs their requested $612,500 in attorney fees.
The settlement, approved in February 2024, requires Goldman Sachs to adjust executive compensation practices, resulting in an estimated $4.6 million reduction in pay. The third version of the settlement removed a claim release that the Delaware Supreme Court had previously deemed overbroad in August 2022, while retaining the terms approved in the 2020 settlement.
Goldman Sachs shareholder and Fordham University Law Professor Sean Griffith, who raised objections to earlier settlement iterations, initially sought approximately $509,000 in fees and $8,000 in expenses. The court acknowledged Griffith’s contribution to creating a narrower release and improving Delaware’s corporate litigation framework but deemed his fee request excessive.
Vice Chancellor Bonnie W. David awarded Griffith a supplemental $50,000, in addition to the $100,000 previously granted for his objections, noting this amount fairly compensates him for the benefits achieved. The payment will be split between Goldman Sachs and the plaintiffs’ $612,500 counsel fee award.
The settlement also caps compensation for nonemployee Goldman Sachs directors at $475,000 for committee chairs and $450,000 for other directors through 2024.
The Delaware Supreme Court had earlier reversed and remanded approval of the second settlement version, finding a release of future shareholder claims overbroad.
The plaintiffs are represented by Farnan LLP and Barrack Rodos & Bacine. Griffith is represented by Margrave Law LLC and Wright Close & Barger LLP. Goldman Sachs directors are represented by Sullivan & Cromwell LLP and Abrams & Bayliss LLP.
