A federal judge in Manhattan has cut in half a request for attorney fees in a securities class action that resulted in a $300 million settlement.
“[I]t is not thirty times more difficult to settle a thirty million dollar case as it is to settle a one million dollar case,” Southern District Judge Loretta A. Preska wrote in awarding $12 million in attorney fees in In re Bristol-Myers Squibb Securities Litigation, 03-2251.
New York’s Bernstein Litowitz Berger & Grossman and Boston’s Berman DeValerio Pease Tabacco Burt & Pucillo had asked for 7.5 percent of the settlement amount, or around $22 million, for serving as co-lead plaintiffs’ counsel in a suit against pharmaceutical giant Bristol-Myers over its $2 billion investment in biotechnology company ImClone. The suit also alleged that improper accounting practices by Bristol-Myers led to a restatement of earnings in 2002.
The suit was dismissed last March, a decision that had been under appeal. Bristol-Myers agreed to the settlement in July. The company shortly after settled for $150 million an action brought by the U.S. Securities and Exchange Commission in New Jersey federal court.
The suit charged that Bristol-Myers executives had made overly optimistic, false and misleading statements about the company’s investment in ImClone, whose cancer treatment drug Erbitux was not accepted in 2001 for fast-track approval by the Food and Drug Administration.
The drug was later approved but the FDA’s initial decision sparked a round of selling by figures including ImClone chairman Sam Waksal and media mogul Martha Stewart, both of whom were convicted of crimes related to their selling of ImClone stock.
The suit also charged that Bristol-Myers had engaged in practices designed to inflate its reported revenue. Those practices were targeted by the SEC and the company announced in 2002 that it would restate some of its earlier financial statements.