In re Delphi Fin. Grp. S'holder Litig. - 2012 Del. Ch. LEXIS 22 (Ch. Feb. 7, 2012)

Rule:

In resolving a dispute over the lead counsel position, the Court's overriding goal is to establish a leadership structure that will provide effective representation to the stockholder class. The well-known Hirt factors provide the Court with guidance in reaching a decision that achieves that objective. Those factors include the quality of the pleading that appears best able to represent the interests of the shareholder class and derivative plaintiffs; the relative economic stakes of the competing litigants in the outcome of the lawsuit (to be accorded "great weight"); the willingness and ability of all the contestants to litigate vigorously on behalf of an entire class of shareholders; the absence of any conflict between larger, often institutional, stockholders and smaller stockholders; the enthusiasm or vigor with which the various contestants have prosecuted the lawsuit; and the competence of counsel and their access to the resources necessary to prosecute the claims at issue.

Facts:

Plaintiff Class A stockholder group moved vacate stipulated leadership structure and appoint a lead plaintiff and lead counsel in a suit against defendant corporation. The stockholder group sought appointment as lead plaintiff representing the Class A stockholders of the corporation and appointment of its counsel. The court had requested that the parties attempt in good faith to negotiate a leadership structure that would be acceptable to all involved, in recognition of the fact that the participating law firms should have a better idea than the Court of what structure they could employ to best serve the plaintiff class. The parties did not do so. 

Issue:

Should the motion of the Class A stockholder group be granted?

Answer:

Yes

Conclusion:

Based on its analysis, the court determined that the Class A stockholder group should be appointed as co-lead counsel alongside another group's Counsel. Counsel should file an amended consolidated complaint incorporating the strongest statement of the case of the plaintiff class. The pleading differences made by the Class A stockholder group were marginal improvements over the complaints filed by the other group. The court was confident that counsels were able to resolve amicably and in the best interests of their clients whatever differences they might have regarding litigation strategy and their respective roles. No conflict existed, so far as the record disclosed, preventing any of the competing firms from litigating the matter fully.