Kodak Stock-Drop Case Yields $2.4M Attorneys’Fees Award

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

Oct. 4 — Attorneys who represented Eastman Kodak Co. 401(k) plan participants were awarded $2.4 million in attorneys’ fees for their efforts in pursuing claims that the plan’s fiduciaries violated ERISA by retaining company stock in the plan ( In re Eastman Kodak ERISA Litigation , W.D.N.Y., No. 6:12-cv-06051, 10/4/16 ).

The fee award follows a $9.7 million settlement reached earlier this year between Kodak and the participants. The attorneys had asked for 30 percent of that settlement as attorneys’ fees, but Judge David G. Larimer of the U.S. District Court for the Western District of New York on Oct. 4 reduced that amount to 25 percent for a total of $2,425,000 plus costs.

In reducing the award, Larimer said the requested 30 percent fee was excessive in light of the circumstances of the case. Six large firms, contributing at least 30 attorneys and nine paralegals, sought full compensation, Larimer said.

The “high hourly billing rates” exceeded what the court found reasonable. The court took issue with the billing rates requested by class counsel, which ranged from $250-$390 per hour for partners from in-district counsel to as much as $950 per hour for out-of district counsel. These rates grossly exceed the typical reasonable hourly rates in this district, Larimer concluded.

The ruling contrasts with a decision issued last week in Kruger v. Novant Health, Inc. (M.D.N.C. 2016) by a federal judge in North Carolina who awarded $10.7 million in attorneys’ fees to class counsel in an Employee Retirement Income Security Act 401(k) fees case. The judge there found that a billing rate of $998 per hour for veteran attorneys was reasonable.

Kessler Topaz & Check LLP, Izard Nobel LLP, Faruqi & Faruqi LLP, Connolly Wells & Gray LLP, Blitman & King, Berger & Montague PC, Gregory M. Egleston, Gainey McKenna & Egleston, Wolf Haldenstein Adler Freeman & Herz LLP, Peiffer Rosca Wolf Abdullah Carr & Kane LLC and Schneider Wallace Cottrell Brayton Konecky LLP represented the class. Phillips Lytle LLP and Gibson, Dunn & Crutcher LLP represented the plan.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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