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July 1, 1977.

Beecher, et al.
Able, et al.; Levy, et al. v. Douglas Aircraft Company, Inc., et al.; Gottesman v. Leslie, et al.; Kobre v. Beall, et al.; Mac Herbst, et al. v. Able, et al.

The opinion of the court was delivered by: MOTLEY


MOTLEY, District Judge:

 These actions are now before the court on a joint application made by all attorneys representing plaintiffs and their accountants for fees totaling one million five hundred thousand dollars ($1,500,000) out of a settlement fund of five million dollars ($5,000,000). *fn1" The request also seeks disbursements in the amount of $71,798.05.The settlement fund of $5,000,000 was established in November 1976 and since that time has been drawing interest which now amounts to approximately $290,000.

 The joint fee application is supported by a detailed affidavit from each of the four law firms representing plaintiffs and their accountants setting forth the following: 1) particulars of the services rendered; 2) the hours expended by partners and associates; 3) the usual hourly rates for partners and associates in noncontingent complex cases; and 4) a separate schedule of disbursements for each firm and for the accountants.

 The joint application is supported by a memorandum of law setting forth the various factors to be weighed by the court in arriving at a fee determination and supporting the amount requested by specific reference to fees awarded by the courts in similar litigation.

 A supplemental affidavit has been filed by lead counsel for the plaintiffs detailing additional services rendered and disbursements made since the filing of the original fee application in October 1976. The amount requested additionally is $73,500.00 for legal services and $302.33 for disbursements.

 The fee of $1,500,000 originally requested was set forth in the Notice of Class Action Settlement, which went to members of the three classes involved, advising them of the terms of the settlement and the amount of the requested fee. The court finds, after a hearing on the proposed plan and a separate hearing on the proposed fee that there have been no objections to the fee requested from any class member.The fee and disbursements originally requested and the supplemental fee and disbursements are awarded. The total awarded is $1,645,600.38.

 In making this award the court has taken into consideration the following factors: 1) the legal services actually rendered; 2) the number of hours spent by partners and associates; 3) the hourly rates normally charged by the partners and paid to associates for non-contingent complex litigation; 4) the complexity of the issues involved; 5) the quality of the legal work; 6) the competence and skill of plaintiffs counsel; 7) the contingent nature of the compensation and the risks assumed; 8) the length of time the cases have been in litigation; 9) the amount recovered for the class; 10) the proportion of the fee award to the settlement fund; and 11) the amount and proportion of fees awarded in similar cases. City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974).

 The first of these five actions was filed on October 4, 1966 and the last in 1968. Even before the actions were certified as class actions, there was a motion to transfer these 5 cases and 8 other cases to California. Thereafter the instant 5 actions were declared maintainable as class actions and the other 8 actions stayed, pending the outcome of these 5 cases. *fn2" Three classes arising out of these 5 cases were delineated: One class consisted of those who purchased Douglas stock from January 19 to September 29, 1966; another class consisted of those who held 4% Douglas debentures worth about $300,000.00 and who converted them into common stock between April 13, 1966 and May 3, 1966; and a class consisting of the purchasers of $75,000,000 4 3/4% debentures issued on July 12, 1966, divided in three subclasses.

 There were numerous claims of false and misleading statements and omissions made by the plaintiff classes against defendant Douglas Aircraft, later McDonald-Douglas.Among these were alleged inflated annual and interim income statements, manipulative dividend increase, falsely optimistic predictions, a false prediction that Douglas would break-even in 1966, misleading statements about use of proceeds of $75,000,000 debenture sale, and failure to disclose pretax loss of more than $7,500,000. All of these, it was alleged, improperly increased the trading price of Douglas' stock and misled the purchasers of the debentures and those who converted their debentures into stock. These claims were asserted under both Section 11 of the Securities Act of 1933 and Section 10b-(5) of the Securities Exchange Act of 1934.

 There were three trials. The first trial involved Douglas' liability under the Section 11 claim of 4 3/4% debenture holders in which plaintiffs prevailed. The second trial related to the amount of damages to be awarded under the Section 11 claim. The third trial related to Douglas' liabilities under Section 10b. This third trial was based upon the evidence adduced at the first trial. Shortly before proceeding to a trial of the damages to be awarded with respect to the Section 10b-(5) action, these cases were settled.

 Most of the legal services were rendered by lead counsel for the plaintiffs.

 As set forth above, those legal services are detailed in the affidavits of two lawyers from the lead counsel firm of Pomerantz Levy Haudek & Block, one from Mr. Abraham L. Pomerantz and the other from Robert B. Block.These services were rendered over a period of more than 10 years. In addition to the transfer motion made by Douglas, the motion for class certification, the motions for discovery and inspection, and the three trials, there was extensive discovery in the form of numerous depositions of the officers of Douglas, written interrogatories, production of hundreds of documents, and numerous pretrial conferences. There was also an appeal from the court's original order regarding the size of the notice to the class. There was a hearing on the fairness of the settlement and two hearings on motions to compel payments of the settlement fund and its reallocation and a motion to reform or rescind the settlement agreement and return part of the $5,000,000 to Douglas because of the paucity of claimants.

 Once the case was settled and notice was given to class members to file their claim forms, it became the task of plaintiffs' counsel to supervise the processing of these claims by a firm hired for this purpose.The court ordered, as a result of the Douglas motion to reform or rescind the settlement amount, further publication of the notice of settlement in an effort to secure additional claimants. Additional claims were filed, making a total of about 1800 claimants.

 In connection with all of these motions, trials and hearings, briefs of good quality were regularly and promptly filed and orders prepared to effectuate the court's decisions by plaintiffs' counsel.

 The complexity of some of the issues involved in this protracted litigation is reflected in the various decisions written by this court. Herbst v. Able, 278 F. Supp. 664 (S.D.N.Y. 1967); Herbst v. Able, 45 F.R.D. 451 (S.D.N.Y. 1968); Herbst v. Able, 47 F.R.D. 11 (S.D.N.Y. 1969); Herbst v. Able, 49 F.R.D. 286 (S.D.N.Y. 1970); Herbst v. Able, 63 F.R.D. 135 (S.D.N.Y. 1972); Levy v. Douglas, FED. SEC. L. REP. (CCH) [*] 93,700 (S.D.N.Y. 1972); Herbst v. Able, FED. SEC. L. REP. (CCH) [*$ 93,923 (S.D.N.Y. 1973); Beecher v. Able, 374 F. Supp. 341 (S.D.N.Y. 1974); Beecher v. Able, FED. SEC. L. REP. (CCH) [*] 94,584 (S.D.N.Y. 1974); Beecher v. Able, FED. SEC. L. REP. (CCH) [*] 95,016 (S.D.N.Y. 1975); Beecher v. Able, FED. SEC. L. REP. (CCH) [*] 95,303 (S.D.N.Y. 1975); Beecher v. Able, 72 F.R.D. 518 (S.D.N.Y. 1976). Among these was whether Douglas' break-even forecast was false and misleading and the liability of Douglas for same under both Section 11 and Section 10b-(5), and the measure of damages under Section 11.

 The work of plaintiffs' counsel in these cases, as reflected in the discovery proceedings, in the presentation of evidence and oral arguments at the trial was of the highest quality. It can not be disputed that two of the lead counsel for plaintiffs, Mr. Pomerantz and Mr. Block, are regarded by the legal profession as among the most competent and the most skillful lawyers in litigation of this kind in the country. Both have participated extensively in similar litigation in the past and have recovered similar awards and similar fees in other cases. Their regular hourly rates for complex litigation involving substantial sums of money are, therefore, among the highest known to the profession.

 These actions were taken on a contingent fee basis, including the fees of the accountants. The settlement agreement was not reached until the cases had been in litigation 10 years. Thus, it was not until the settlement agreement was finally approved by the court that plaintiffs and their counsel were assured of any award. The amount of the recovery for the class, $5,000,000, was, as this court has already found, fair and reasonable settlement in view of the novelty of the major issues and the consequent lack of assurance that this court's favorable decisions for plaintiffs would be affirmed on appeal.

 The negotiations which finally culminated in a settlement fund of $5,000,000 involved at least a year of such negotiations. Plaintiffs' counsel had the responsibility of replying to all inquiries made to the court over the years in addition to letters relating to the processing of the claims.Finally, plaintiffs' counsel has the responsibility for supervising distribution of the settlement fund.

 There were nine lawyers in the lead counsel firm which represents plaintiffs in the Beecher & Herbst actions and who worked on these cases over the years. They put in a total of 6,148 hours and 50 minutes. These hours were valued at a total of $915,132, using the non-contingent litigation rates. The supplemental affidavit shows a total of 47 and 1/2 hours valued at $24,537.50, at the non-contingent rate, but then valued at three times that figure, or $73,500, to reflect the unusual risk or contingency factor involved. Plaintiffs claim that the motion made by Douglas to reform or rescind the settlement agreement put in jeopardy the $5,000,000 settlement award. This added, they claim, an extra special risk factor justifying a multiplier of 3 with respect to the normal fee award. The court agrees.

 The partners and associates who are counsel in the Levy action, Linden and Deutsch, and the predecessor firm, Bergerman and Hourwich, totaled 1,555 and 1/4 hours.They seek a combined fee of $185,000. The time spent by the firm of Milberg and Weiss, counsel in the Gottesman case, totaled 463.25 hours. They seek a fee award of $80,000.00.The firm of Weinstein and Levinson, counsel in the Kobre case, devoted 676 1/2 hours. They seek a fee award jointly with the lead counsel firm bringing that total to $1,000,000.The accountants for plaintiffs in these cases, David Berdon and Company, total 1,762 hours of partner and 106 hours of staff member time. They value these hours at a total of $178,600, using normal rates. However, they now seek a total fee of $250,000 based upon several factors:

 (a) the substantial time devoted to this engagement, principally by two partners of the firm;

 (b) the substantial benefits achieved for the security holders of Douglas in respect of which the firm made an outstanding contribution;

 (c) the fact that the compensation of the firm was wholly contingent on the successful outcome of the litigation;

 (d) the fact that the services rendered by the firm were highly specialized, requiring special abilities and skills of two partners; and

 (e) the extraordinary pressures and personal sacrifices demanded by the engagement.

 The court agrees that these factors merit the additional consideration requested.

 The combined disbursements requests, as set forth in the affidavits, amount to $71,798.05. The supplemental affidavit filed by lead counsel seeks an additional $302.33 for disbursements. All disbursements are allowed.

 The total fee request amounts to approximately 30% of the total award, including interest. This includes the award to the accountants of $250,000. Consequently the total fees for the lawyers involved is approximately 25% of the settlement award.

 In their brief in support of this joint application, plaintiffs' counsel have set forth a number of similar cases in which similar large fee awards representing between 20% to 30% of the recovery have been made and in which the courts have taken into account the risk factor. This factor has resulted in a substantial adjustment upward from the non-contingent hourly billing rates in complex cases.Consequently, the court finds that the award now made in this case is not out of line with awards in similar cases. See, e.g., Doughboy Industries, Inc. v. American Cyanamid Corp., 1975-2 Trade Cases [*] 60,452 (D. Minn. 1975); In re Gypsum Cases, 386 F. Supp. 959 (N.D. Calif. 1974); Arenson v. Board of Trade of the City of Chicago, 372 F. Supp. 1349, 1358 (N.D. Ill. 1974); Fried v. Utilities Leasing Corp., FED. SEC. L. REP. (CCH) [*] 95,695 (E.D. Pa. 1976); Stull v. Baker, 410 F. Supp. 1326, 1338-9 (S.D.N.Y. 1976); Rosenfeld v. Black, 56 F.R.D. 604, 605-6 (S.D.N.Y. 1972); Seiffer v. Topsy's International, Inc., 70 F.R.D. 622, 635 (D. Kans. 1976); Handel v. Gold, FED. SEC. L. REP. (CCH) [*] 95,444 (S.D.N.Y. 1976); Hawk Industries, Inc. v. Bausch & Lomb, Inc., FED. SEC. L. REP. (CCH) [*] 95,306 (S.D.N.Y. 1975); McCausland v. Shareholders Management Co., FED. SEC. L. REP. (CCH) [*] 94,580 (S.D.N.Y. 1974); Siegel v. Realty Equities Corp. of N.Y., FED. SEC. L. REP. (CCH) [*] 94,102 at p. 94,447 (S.D.N.Y. 1973).

 The Second Circuit has expressly approved the awarding of an adequate fee in securities litigation of this kind in order to encourage private attorneys to undertake such litigation which, in the final analysis, is for protection of the investing public. See, e.g., Grace v. Ludwig, 484 F.2d 1262, 1267 (2d Cir. 1973), cert. denied, 416 U.S. 905, 40 L. Ed. 2d 110, 94 S. Ct. 1610 (1974); Dolgow v. Anderson, 43 F.R.D. 472, 487 (E.D.N.Y. 1968); Rosenfeld v. Black, 56 F.R.D. 604, 605 (S.D.N.Y. 1972).

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