In re Orbit/FR, Inc. Stockholders Litig.

Summary

The Delaware Court of Chancery grants lead plaintiff AB Value Partners, L.P.’s request for a $730,000 incentive award in a stockholders’ class action that settled for $17.85 million. The court based the award on AB Value’s substantial time, effort, financial resources, litigation contributions, and the significant benefit obtained for the class, while finding no problematic conflicts or perverse incentives.

Holdings

1. A class representative may receive a restitution-based incentive award when the representative has devoted substantial time, effort, expertise, and resources to the litigation and generated a significant benefit for the class.
2. AB Value was entitled to an incentive award because it made an exceptional contribution to the litigation, invested substantial personal and financial resources, assumed significant downside risk, and helped obtain a major benefit for the class.
3. An incentive award of $730,000 was appropriate.

Questions Presented

1. Whether a named plaintiff who makes an exceptional contribution to a class action may receive an incentive award as restitution for time, effort, expertise, costs, and risks undertaken for the class.
2. Whether AB Value's contributions, resources expended, benefit obtained for the class, and lack of problematic incentives justified an incentive award.
3. What amount of incentive award was appropriate under the circumstances.

Disposition

other