Jan. 29 (Bloomberg) -- Milberg Weiss & Bershad, the law firm indicted for paying kickbacks to plaintiffs, was awarded a little more than one-third of the $101 million it sought for winning a billion-dollar shareholder settlement from Nortel Networks Corp.

U.S. District Judge Richard Berman in New York today said Milberg was entitled to $37.7 million in legal fees and expenses. Berman said the $101 million the firm was asking for would have been ``excessive,''

The ruling is the latest setback for New York-based Milberg, which has been charged with paying clients to lend their names to securities class-action lawsuits. Since the firm and two partners were indicted in May, Milberg has lost clients, lawyers and lead- counsel status in several cases.

Milberg was the lead law firm in a securities class-action against Toronto-based Nortel, North America's biggest maker of telephone equipment. The case settled last year for more than $1 billion. Milberg said it would share its fees with eight other firms.

The $37.7 million award ``serves the dual purpose of encouraging counsel to bring appropriate cases and not granting fee awards that are excessive,'' Berman wrote today.

Milberg spokeswoman Gina Rivera didn't immediately return a call and e-mail seeking comment.

`Qualified'

Berman and another judge approved the settlement in December. Investors accused Nortel of accounting manipulations, including inflating revenue from fiber-optic equipment contracts. The $3.2 billion accounting fraud led Nortel to fire officials, including Chief Executive Officer Frank Dunn.

As lead lawyer, Milberg mapped strategy and conducted negotiations. Steven Schulman, one of the two partners indicted by a federal grand jury in Los Angeles, ran the case for Milberg, according to court records.

The firm devoted 47,846 hours to the case, Berman said. In his ruling, Berman noted Milberg's indictment and said the firm is ``qualified and experienced'' in shareholder litigation.

Milberg claims on its Web site that it's recovered more than $45 billion for investors since its founding in 1965. Last week, two partners who headed the firm's antitrust practice, J. Douglas Richards and Michael Buchman, joined another firm.

Expenses

In December Milberg suffered a blow in a billion-dollar lawsuit against Wall Street banks when an appeals court refused to certify part of the case as a class-action.

Of the $37.7 million award in the Nortel case, $34 million is for fees, and $3.7 million is for expenses.

The Nortel case is In re: Nortel Networks Corp. Securities Litigation, 01-cv-1855, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in U.S. District Court in New York at 2587 or dglovin@bloomberg.net.

Last Updated: January 29, 2007 18:10 EST