Fee Fight: From $230M Request to $70.9M Award
The attorneys initially sought $230 million in fees. In October 2023, during a hearing, counsel for Tesla stockholders pressed company lawyers on whether the returned options would restore $458 million to Tesla’s equity balance sheet.
Chancellor McCormick ultimately approved a reduced award of $176.16 million, citing in part the dispute over how to value the returned options. Plaintiffs’ attorneys placed the benefit at $180 million; Tesla argued the gain was effectively zero.
“I struggle to value this benefit in this case,” the chancellor said at the time, emphasizing the court’s aim to avoid windfalls in fee determinations.
Still, she defended the award, noting that plaintiffs’ counsel litigated for years on a fully contingent basis “with no certainty that they would ever receive a penny.”
Tesla appealed in April 2025, urging the Supreme Court to pare back what it called a “windfall in a case that settled well before trial and after three years of only tepid litigation.”
On Friday, the justices agreed in part, slicing the award to roughly $70.9 million and signaling a stricter approach to valuing noncash settlement components.
Counsel for the parties did not immediately respond to requests for comment late Friday.
