The opinion of the court was delivered by: EDELSTEIN
MEMORANDUM OPINION AND ORDER
This opinion involves a determination of reasonable attorneys' fees to the representatives of the prevailing classes in an interpleader class action.
This class action was brought by the trustees and issuer of bonds under two indentures for the determination of the bondholders' rights to certain interest payments. The facts giving rise to the interpleader action action are set forth in this court's Opinion and Order dated November 20, 1984, United States Trust Co. of N.Y. v. Executive Life Ins. Co., 602 F. Supp. 930 (S.D.N.Y. 1984), and the court will not repeat them here. In the November 20th Opinion and Order, this court: (1) granted the motions for summary judgment of the 9-1/4% Holding Class and the 5-3/8% holding Class; (2) denied the cross motions for summary judgment of the 9-1/4% Selling Class and the 5-3/8% Selling Class; (3) awarded the Holding Classes the interest installment funds held by the stakeholders, United States Trust Company of New York ("U.S. Trust") and The Chase Manhattan Bank, N.A. ("Chase"); (4) awarded the representatives of the two Holding Classes costs, including reasonable attorneys' fees, to be paid out of the class funds; (5) ordered the representatives of the two Holding Classes to submit fee applications; and (6) ordered the class representatives to send notice to the class members of the court's decision.
The co-representatives of the 5-3/8% Holding Class are Bear Stearns & Co. ("Bear Stearns"), who were represented in this action by the law firm of Donovan, Leisure, Newton & Irvine ("Donovan Leisure'), and Mutual Shares Corp. & MUtual Qualified Income Fund ("Mutual"), who were represented in this action by the law firm of Tenzer, Greenblatt, Fallon & Kaplan ("Tenzer Greenblatt"). The representatives of the 9-1/4% Holding Class are Mimi Shapiro and Mortimer Shapiro ("the Shapiros"), who were represented in this action by the law firm of Crystal and Driscoll, P.C. ("Crystal"). The representatives of the two Holding Classes have submitted fee applications. The trustees under the indentures and the class members have been provided the opportunity to file objections to the fee applications.
1. The Application of the Co-representatives of the 5-3/8% Holding Class.
The total amount of attorneys' fees sought by the co-representatives of the 5-3/8% Holding Class is $33,685.69. As of March 28, 1985, the 5-3/8% Holding class fund contained $983,872.28. Letter of Chase, Trustee for the 5-3/8% debentures, dated March 25, 1985. The total attorneys' fees requested constitutes approximately 3% of the class fund. Bear Stearns seeks $22,956.87, consisting of $19,434.00 in professional services and $3,522.87 in disbursements. Mutual seeks $10,728.82, consisting of $9,416.50 in professional services and $748.82 in disbursements. Chase, the trustee for the 5-3/8% Holding Class, has not objected to the fee applications of the co-representatives.
On March 19, 1985, Doris S. Mermelstein and Milton E. Mermelstein ("the Mermelsteins"), pro se, filed objections to the fee applications of the 5-3/8% Holding Class representatives. The Mermelsteins do not object to the amount requested by the Holding Class representatives, but object to the payment of any legal fees prior to satisfaction of the Mermelsteins' claims on the 5-3/8% debentures. the Mermelsteins contend that no dispute ever existed that they were entitled to the withheld interest installments at issue in this action, and thus they are entitled to their money, undiminished by attorneys' fees paid to the class representatives.
The 5-3/8% Selling class consists of all persons or entities who held of record 5-3/8% debentures on May 5, 1980 and/or November 5, 1980 and/or May 5, 1981, and who subsequently transferred of record 5-3/8% debentures so held. The 5-3/8% Holding Class consists of all persons or entities who held of record as of June 9, 1983, 5-3/8% debentures that were transferred of record by a member of the 5-3/8% Selling Class after May 5, 1980. This action involved a dispute between the Selling Class and the Holding class as to the entitlement to certain withheld interest payments. The Mermelsteins, however, were not members of either the Selling or the Holding class, because they beneficially owned their debentures before may of 1980, and did not transfer ownership before June 9, 1983. there was thus never any dispute as to their entitlement to the withheld interest payments. The Mermelsteins contend that their payments are not part of the Holding Class fund and thus should not be diminished by any attorneys' fees awarded to the Class representatives.
At the hearing held on March 22, 1985, Chase confirmed that the Mermelsteins were beneficial owners of the 5-3/8% debentures throughout the disputed period, and were at all times entitled to the withheld interest. Transcript of Proceedings of March 22, 1985 ("R."), at 12-13.
Accordingly, the Mermelsteins' share of the interest fund is not to be diminished by an attorneys' fees awarded to the co-representatives of the 5-3/8% Holding class.
No other objections to the fee application of the co-representatives of the 5-3/8% holding class have been filed. The court finds the attorneys' fees requested by the co-representatives of the 5-3/8% Holding Class have been filed. The court finds the attorneys' fee requested by the 5-3/8% Holding Class to be reasonable. Donovan Leisure and Tenzer Greenblatt worked together on the motions for summary judgment. This arrangement produced legal memoranda that were among the best, in terms of legal reasoning and research, of all the firms that appeared on the motions. Donovan Leisure has submitted a detailed and clearly written summary of the work performed by its attorneys and the hourly rates charged. Tenzer Greenblatt has submitted photocopies of its time records. The hourly rates charged by each firm are reasonable. The highest rate is $250.00 per hour, charged by William Klein II of Tenzer Greenblatt, a senior partner, who graduated Yale Law School in 1943. The hourly rate of $250.00 is certainly at the higher end of the range of prevailing market rates. However, Mr. Klein only billed 13 our of the 77 hours billed by his firm. Moreover, it appears from the time records submitted that the work performed by Mr. Klein deserves compensation at senior partner rates. The remaining attorneys for Donovan Leisure and Tenzer Greenblatt charged hourly rates ranging from $72.00 per hour for a first year associate, to $160.00 per hour for a first year partner. since December of 1983, Donovan Leisure's attorneys spend 177.5 hours on this case. Donovan Leisure also has submitted a listing of contemporaneous time records, describing the work done by each attorney. These records reflect the firm's consciousness of the need to economize its efforts and to distribute work in accordance with an attorney's level of expertise. Accordingly, the application of the co-representatives of the 5-3/8% Holding Class is granted.
2. The Application of the Representatives of the 9-1/4% Holding Class.
The Crystal firm has requested $200,000.00 in attorneys' fees and $2,238.75 in disbursements. As of March 25, 1985, the 9-1/4% Holding Class fund contained $2,409,764.26. Thus, Crystal requests approximately 9% of the class fund in attorneys' fees. U.S. Trust, the Trustee for the 9-1/4% notes, has filed objections to Crystal's fee application. The application filed February 8, 1985 is inadequate in the following respects: (1) it seeks attorneys' fees grossly disporportionate to the fees requested by the representatives of the 9-1/4% Holding Class; (2) it fails to provide adequate background information of the Crystal firm; (3) the time records submitted in support of the fee application are illegible, see in re Continental Illinois Securities Litig., 572 F. Supp. 931, 934 (N.D. Ill. 1983) ("description of the work done should be sufficient to demonstrate that it benefitted the class or contributed to the recovery of the common fund"); and (4) ...