Author, model and Elon Musks mother Maye Musk gives updates on her sons DOGE plans and applauds their accomplishments, while commenting on Elons big goals for doing good.
A Delaware judge’s ruling that plaintiffs’ lawyers in a lawsuit against Elon Musk are entitled to hundreds of millions of dollars in legal fees has sparked renewed calls for reform on social media and a legal expert spoke to Fox News Digital.
Chancellor Kathaleen St. Jude McCormick ruled earlier this month that Musk is not entitled to a multi-billion dollar compensation package even though Tesla shareholders have agreed to it. McCormick also refused the big deal request for money by the plaintiff’s lawyerswho argue that they are entitled to legal fees in the form of Tesla stock valued at more than $5 billion. However, McCormick ruled that the lawyers were entitled to $345 million.
The record fee request was made by investor Richard Tornetta on behalf of three law firms that represented him in a lawsuit against Musk’s compensation plan, which is believed to be the largest among CEOs of publicly traded companies in the US.
Tornetta owned nine shares of Tesla when he sued the pay package approved by shareholders in 2018 before it was first blocked by McCormick of the Delaware District Court in January. The payment request amounted to about $7.2 billion in Tesla’s stock value at the time and up to $370,000 per hour worked by a team of 37 attorneys, associates and paralegals — some of whom often charge as little as $275 an hour, according to documents filed by Tornetta’s legal team in court.
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A judge awarded $345 million in attorney’s fees related to Elon Musk’s compensation dispute. (Getty Images)
“Lawyers who have done nothing but hurt Tesla want $6 billion,” Musk said posted on X in March 2024 in response to the first question sought by the plaintiff’s lawyers. “The criminal.”
The $345 million verdict, according to Reuters, represents “the largest ever award in a securities case,” and the Associated Press reported that “the monetary award is roughly half of the current record $688 million in legal fees awarded in 2008 in 2008. cases stemming from the collapse of Enron.”
The big ruling has led many to call for more reform legislation to protect against capital or wrongful damages in lawsuits.
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Elon Musk, CEO of Tesla Inc., raises a glass at the Atreju meeting in Rome on Saturday, December 16, 2023. (Alessia Pierdomenico/Bloomberg via Getty Images)
“When consumer goods and services have to be priced to compensate lawyers at an hourly rate of $17,692 something has gone terribly wrong with the American legal system,” Gordon Gray, executive director of the Pinpoint Policy Institute, told Fox News Digital.
“Policymakers must advocate for their members to reduce the abuse of refugees.”
“Adding insult to injury, Delaware Judge McCormick ordered #Tesla shareholders to pay plaintiff’s lawyers $345 million!” Ark Invest Founder and CEO Cathie Wood posted on X. “Plaintiff owns 9 shares of TSLA. McCormick makes a mockery of the sense of justice that is central to our American judicial system.”
“This decision and the lawyers’ payola is absurd,” said billionaire hedge fund manager Bill Ackman. posted on X. “We’re going to see an exodus of Corporate America from Delaware.”
“This is absurd,” said financier Bill Gurley posted on X. “If the 9-share plaintiff actually makes money (no damages) it could result in $345mm in legal fees, every Delaware company is at risk and will be targeted. Everyone needs to change their seat asap. It’s taking derivative suits and turning them into a whole new plane.”
“The majority of Tesla shareholders approved Elon’s comp package in 2018 and have approved it again now,” White House AI insider and Crypto Czar David Sacks posted to X in June. “The activist judge imprisoned him for nothing. The lawyers of the case who are asking for billions of money should get nothing.”
Elon Musk, right, speaks with President-elect Donald Trump. (Photo by Brandon Bell/Getty Images/Getty Images)
“It’s absurd to suggest that any financial gain from this case could justify the high fees of the plaintiffs’ lawyers,” Tesla shareholder Liang Guo of Fort Lee, New Jersey, told the judge, according to Bloomberg. Shareholder Brian Lecher said, “Instead of respecting the wishes of the shareholders and rewarding the hard work of the CEO, it seems that the court is rewarding lawyers who have done nothing for the company or the shareholders.”
Bloomberg reported that McCormick is “legally bound” to ignore letters from shareholders, noting that Larry Hamermesh, a retired law professor familiar with Delaware corporate disputes, called the situation “uncharted waters.”
“There is no clear guidance in the law for a payment like this.”
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“Musk’s firms are some of the most innovative and important things out there—from space travel to artificial intelligence to free speech to electric cars,” columnist Josh Hammer wrote in the City Journal this month. “Yet companies like his are seen as left-wing advocates as their future targets.”
“But efforts to change the law are not just about one case, one CEO, or one millionaire. The point is to fix a broken system that raises costs for all American businesses and threatens. Voters gave Trump the mandate in the 2024 election. . Next year, he and the Republicans in Congress must participate to the entry of a left-wing attorney, protect consumers and businesses, and reduce costs in the worst parts of the Washington, DC swamp.”
In a statement sent to Fox News Digital, a spokesperson for the Delaware Court of Chancery said, “The Court’s written decision speaks for itself.
Reuters and Fox News Digital’s Eric Revell contributed to this report
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