Two Law Firms to Earn $8M in Fees for Serving as Brocade Co-Counsel

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Two Law Firms to Earn $8M in Fees for Serving as Brocade Co-Counsel

Posted Aug 25, 2008, 05:37 am CST
By Debra Cassens Weiss

Two San Diego plaintiffs law firms will earn at least $8 million in fees to drop their backdating lawsuits against Brocade Communications and assist the company’s special litigation committee in its suit.

The payment arrangements for Johnson Bottini and Robbins Umeda & Fink were disclosed under an order by U.S. District Judge Charles Breyer, the Recorder reports. The special committee’s suit against 10 former executives and board members seeks to recover money lost because of the backdating scandal.

The firms will serve as co-counsel with the special committee’s law firm, Dewey & LeBoeuf.

The agreement (PDF posted by the Recorder) says the firms will receive an aggregate of $4 million within a month and $4 million when the case is over. It also sets out a formula for additional fees that will be paid. The firms will get 25 percent of the first $250 million and smaller percentages for higher amounts. The obligation to pay the firms is capped at $25 million.

The $9.5 million paid for a release of claims by Brocade’s law firm, Wilson Sonsini Goodrich & Rosati, won’t count toward the total recovery.

Johnson Bottini and Robbins Umeda have been working on Brocade cases for a couple years, the story says. Securities litigators told the publication that the big up-front payment likely means that Brocade must be expecting a huge recovery.

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