According to the Associated Press, anyone who owned stock during the period covered by the suit would get roughly 25 cents per share, if every eligible shareholder files a claim, but attorneys are asking for 19% of the cash pool for their work — nearly $60 million. The Pennsylvania State Employees’ Retirement System said lawyers are asking for the equivalent of $2,310 an hour, based on 24,920 hours reported by the attorneys or law firms involved.
The case began with lawsuits in 2005 accusing GM and its directors of major accounting mistakes, misleading investors, the AP reports. The lawsuits were consolidated in Detroit in 2006 and turned into a class action case involving investors who owned stock or bonds between April 13, 2000, and March 30, 2006.
GM has agreed to pay $277 million and its auditor, Deloitte & Touche, will pay $26 million. Investors’ losses were estimated at $3.5 billion.
In the attorneys’ defense, James Sabella of New York, a lead lawyer for investors noted: “This is cash, not coupons, not stock. It was extracted from a company in a very bad financial position. We worked on this case for three years with the prospect we’d end up with nothing,” according to the news report.
In June, a federal judge approved a $37.5 million settlement in a suit over the investment of General Motors stock in its 401(k) plan (See Judge OKs GM 401(k) Stock Drop Settlement ). The Associated Press said lawyers were awarded 30% in that case.
U.S. District Judge Gerald Rosen has granted preliminary approval to the current settlement, but will hold a final hearing December 22.