Tesla lawsuit lawyers seek record-breaking $5.6 billion in fees after winning high-profile case against Elon Musk

A Delaware court judge denied Tesla CEO Elon Musk's bid to reinstate his compensation package, which is currently worth $100 billion. 

Nonetheless, another denial was issued: the attorneys who successfully claimed that Musk's compensation was improper and should be reversed sought $5.6 billion for their work. The judge didn't really bite.

Elon Musk listens as US President-elect Donald Trump speaks during a House Republicans Conference meeting at the Hyatt Regency on Capitol Hill on November 13, 2024 in Washington, DC.

Allison Robbert-Pool/Getty Images

They, however, performed somewhat better than Musk. Delaware Chancellor Kathaleen McCormick awarded plaintiffs' attorneys from three law firms $345 million in cash or Tesla stock, down from the $5.6 billion sought by the law firm for filing the successful challenge. The three firms are Bernstein Litowitz Berger & Grossman LLP, Andrews & Springer LLC, and Friedman Oster & Tejtel PLLC. 

Bernstein Litowitz Berger & Grossman said in a statement that they were satisfied with the decision and the settlement of attorneys' fees. "We hope that the Chancellor's well-reasoned judgment brings an end to this situation for Tesla shareholders. However, if the defendants choose to appeal this verdict, we look forward to the opportunity to defend the Court's serious and well-grounded judgments on appeal to the Delaware Supreme Court."

McCormick granted the fee petition in part, writing that the businesses' technique was "sound." But applying a percentage of the value achieved by rescinding a $55.8 billion pay plan yields "an eye-popping figure," McCormick said. Tesla's lawyers sought for $54.5 million. 

"The fee award here must yield in this way, because $5.6 billion is a windfall no matter the methodology used to justify it," she wrote. 

When assessing the costs for the plaintiff's attorneys, McCormick recognized that their time and efforts were significant. Lawyers worked 19,499.95 hours, conducting an investigation, document discovery, and taking 17 depositions, among other tasks. "Plaintiff faced some of the best law firms in the country, who put Plaintiff through their paces," wrote McCormick. They also encountered a "massive contingency risk."

She wrote that the incentive reflects a 25.3 multiplication of the lawyers' working hours.

"Plaintiff's counsel's standing and ability support the fee," McCormick said in her opinion. "They are experienced stockholder advocates who have secured some of the largest recoveries in the court's history and successfully taken high-stakes cases through trial and appeal." FA