WILMINGTON, Del. (Reuters) - A Delaware judge on Wednesday approved a $275 million shareholder settlement involving videogame maker Activision Blizzard Inc and awarded the small law firms that brought the case a $72.5 million fee.
The owner of the “Call of Duty” game agreed to the settlement last year, which ended a shareholder lawsuit challenging Activision’s $8 billion deal to acquire its stock held by French conglomerate Vivendi SA. The lawsuit alleged that Activision’s chief executive and co-chairman benefited unfairly from the deal, and the settlement barred them from gaining control of Activision.
On Wednesday, Travis Laster, a judge on Delaware’s Court of Chancery, overruled an objection to the settlement and to the fee award. The lawsuit was led by the four-attorney firm of Friedlander & Gorris in Wilmington, Delaware, and the six-lawyer firm of Bragar Eagel & Squire of New York.
“This case involved true contingency risk,” wrote Laster, in a 90-page opinion approving the fee and settlement. He noted the partners of the firms involved took out personal loans to fund the case and turned away other work.
The fee award works out to $9,500 an hour, according to court records. “While the size of the award implies a generous hourly rate, in this case it is justified by the effort,” wrote Laster.
The fee award was opposed by two shareholders who said their attorneys had contributed to ultimate settlement by opposing an attempt to strike an early deal in the case. They sought $7.25 million for lawyers at Levi & Korsinksy of New York and Smith Katzenstein & Furlow of Wilmington.
Laster rejected that argument and noted “they can claim to have contributed causally to the settlement only in the metaphysical sense that the flap of a butterfly’s wings in Beijing may lead to a thunderstorm in Delaware.”
The case was a derivative lawsuit, meaning the investor who brought it, Anthony Pacchia, was suing on behalf of Activision. The settlement was paid to Activision’s treasury by Vivendi, insurers and an investor group that included Activision Chief Executive Bobby Kotick and co-Chairman Brian Kelly.
The settlement is the largest ever for a shareholder derivative lawsuit. Other large settlements include $139 million involving News Corp in 2013 and $122 million paid by Oracle Corp’s chief executive, Larry Ellison, in 2005.
The Friedlander firm was known as Bouchard, Margules & Friedlander when it brought the lawsuit.