(CN) – A judge sacked the co-lead counsel for Revlon shareholders who are contesting a merger in a class action in Delaware Chancery Court, saying their “advocacy has been non-existent.”
“The original plaintiff’s counsel failed to litigate the case adequately,” Vice Chancellor J. Travis Laster wrote in the case of the cosmetics company’s proposed merger with its primary shareholder, McAndrews & Forbes Holdings Inc.
Laster also questioned whether the shareholders’ counsel represented the class or merely “settled on terms that would be easy gives for the defendants while still arguably sufficient to support a release and a fee.”
“When forced to defend their conduct and leadership role, original plaintiff’s counsel approached the concept of candor to the tribunal as if attempting to sell me a used car,” Laster wrote, referring to co-lead counsel Wolf Popper LLP and Rigrodsky & Long, and Delaware liaison counsel Rosenthal, Monhait & Goddess.
The merger announcement prompted four lawsuits that were consolidated into one. The law firms divided up their roles, but as Laster noted, “no one actually litigated anything.”
He said the lawyers settled prematurely and exaggerated their roles in restructuring the proposed merger as a stock exchange offer.
This is a serious problem that must result in the replacement of the shareholders’ “Old Counsel,” according to Laster.
“Given Old Counsel’s hyperbolic representations and my concerns about the [settlement], I cannot in good conscience permit Old Counsel to take charge of the confirmatory discovery process and the presentation of the settlement,” Laster wrote.
He gave that task to Smith Katzenstein & Furlow LLP, Harwood Feffer LLP and Curtis V. Trinko, the attorneys in two subsequent lawsuits challenging the exchange offer.
“When handed a chance to stand up for the class, Old Counsel lay down,” Laster wrote.
He said the system requires meaningful checks on attorneys, including “the ability and willingness of this court to replace representative counsel who engage in conscious shirking, who appear to be doing little more than prematurely harvesting a case as part of their overall inventory, and who otherwise are not providing adequate representation.”