Lawyers Who Fought Against Musk’s Pay Seek $7 Billion Tesla Stocks

• Earlier this year, a Judge from the US state of Delaware overturned a pay deal that awarded Musk with $55.8bn for his work in Tesla.
• Now, the lawyers who won the case are now back in court, demanding the fee for their service. But the problem is, they want a huge slice - $7 billion worth of Tesla stocks to be precise.
• The request has been heavily criticized with some saying they deserve no fee at all while others saying they deserve a reasonable hourly fee.

The lawyers who got Elon Musk's massive pay package voided earlier this year are now in court once again, but this time they are asking for a massive fee for helping out a Tesla stockholder.

Sounds confusing right? Let's rewind a little and start from the beginning.

Elon Musk was given a $55.8bn (44bn) pay deal from Tesla - the electric car company where he serves as the CEO.

However, one of the shareholders, Richard Tornetta (who owns only 9 Tesla shares) thought that he was being overpaid and appealed against it. As a result, Judge Kathaleen McCormick of the US state of Delaware canceled the deal.

She said that the deal was unfathomable" and the directors who negotiated the package were so struck by Musk's superstar appeal" that they did not think it through.

This is not an exaggeration. Musk's package was literally one of the biggest ever in the US corporate history. So much so that it was one of the factors that helped him be among the richest men in the world.

What Do the Lawyers Want?

Now that the case is over, the lawyers are here for their own share and they want a big one. They are asking their payment to be made in the form of Tesla stocks worth $7 billion at current trading prices.

The request has been made to Chancellor Kathaleen St. Jude McCormick, who even after a full day of expert-witness testimony and arguments by attorneys, doesn't seem likely to approve the request.

The current record for the highest legal fees dates back to 2008, in a case related to the collapse of Enron. The lawyers involved in the case were awarded $688 million which is nothing compared to this outrageous $7 billion request. What Do the Lawyers Have to Say About Their Request?

The lawyers are still convinced that their request is justified. They also argue that their request is well within the provisions of Delaware law. Traditionally, attorneys are entitled to a 33% fee recovery whereas their request is just 11% of the additional value they created by getting Musk's package rescinded.

We did battle with the very best. Litigation against Tesla is never easy. There are companies who play by the rules every day, and then there are companies like Tesla.' - Attorney Greg Varallo

On the other hand, the opposers of this fee request said that the attorneys deserve no fee at all. Their actions did not benefit the company in any way, if anything, they did a lot of damage.

Others argue that whatever fee is granted to the attorneys should be purely based on the number of hours they worked and a reasonable hourly rate for the same should be decided.

The lawyers have acknowledged all the criticisms and offered an alternative. They are ready to take $1.44 billion in cash which equals an hourly fee of about $74,000. To give you a better understanding of the difference, their current fee requests amount to an hourly rate of about $288,000.

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