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Judge in Musk’s Compensation Package Case Warned of Potential Huge Legal Fees Benefit


The Delaware High Court has warned Judge Kathaleen McCormick about the potential massive legal fee windfall that attorneys could receive from the Elon Musk pay package case. The judge ruled that Musk’s $56 billion pay package was too excessive, not in the best interest of shareholders, and it was revoked. Now, the attorneys who successfully argued the case could receive a pay rate of $280,000 an hour, which the court has cautioned could turn into a windfall.

The attorneys are requesting an 11 percent fee of the stock that Musk would have received, amounting to nearly $6 billion in Tesla shares. They argue that they deserve this amount for winning what they call “arguably the largest judgment in U.S. history.” However, Tesla attorney Paul Reed questions if the lawyers are being overpaid, especially since shareholders have since approved Musk’s pay package in a re-vote after the court ruling.

The situation poses a dilemma for Judge McCormick, as shareholders’ approval could override her initial ruling. This puts her in a tough position as she considers whether the attorney fees should be paid by Tesla or not. The case highlights the contentious issue of legal fees in high-stakes corporate litigation, with some arguing that while substantial fees can be appropriate for high-risk cases, there is a line that should not be crossed. The outcome of this case will have implications for future high-profile corporate legal battles and the fees attorneys can command for their services.

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