(CN) – A federal judge in Manhattan approved the $12 million settlement of a securities fraud class action against directors of The Children’s Place, but called the request for $3.24 million in attorney fees “excessive.”
After two years of litigation, The Children’s Place agreed to settle the shareholder class action for $12 million, or $10 to $11.71 per share for each claimant.
U.S. District Judge Shira Scheindlin called that amount “fair, reasonable and adequate.”
But Scheindlin was less receptive to class counsel’s request for 27 percent of the settlement in attorney fees, saying $1.8 million was “more than adequate to compensate class counsel for its effort and reward class counsel for the risk it undertook in litigating this case.”
Executives of The Children’s Place were accused of issuing false and misleading financial statements that failed to disclose problems with the company’s licensing agreement with Disney.
As a result, The Children’s Place was unable to make or sell any Disney-branded merchandise — a substantial source of profit, according to the lawsuit.
Judge Scheindlin upheld the $12 million settlement and reduced attorney fees to 15 percent of the settlement fund.