Grant & Eisenhofer Law Firm Sued by Shareholder Over Its Fees in Tyco Case
Grant & Eisenhofer, a law firm specializing in shareholder litigation, was sued by an investor in Tyco International Ltd. over claims it committed malpractice by taking excessive fees from Tyco’s $3.2 billion settlement.
Grant & Eisenhofer “stole hundreds of millions of dollars from their clients in 2007” with a fee award of almost $500 million, investor Richard Gielata said in a complaint filed today in federal court in Wilmington, Delaware.
His son and attorney in the case, Joseph Gielata, was a lawyer at Grant & Eisenhofer about six years ago, according to a statement today by the firm.
The firm had a contract with the Teachers Retirement System of Louisiana, one of the co-lead plaintiffs, to limit its fee request to $210 million and to oppose anything higher, according to court papers. The agreement had been “kept hidden for years,” the complaint claims.
Tyco in December 2007 won approval of the settlement in federal court in Concord, New Hampshire. Plaintiffs accused the company of inflating revenue under former Chief Executive Officer L. Dennis Kozlowski.
Grant & Eisenhofer described Joseph Gielata in an e-mailed statement as a “former disgruntled employee.” The firm will defend the case vigorously, and its principals “vehemently deny these accusations,” according to the statement.
Joseph Gielata, who issued a press release after filing the complaint, declined to comment further when reached by phone.
The plaintiff is seeking class status to represent more than 300,000 Tyco claimants. He asked for a jury trial and at least $215 million in damages, as well as legal fees and expenses.
Jay Eisenhofer at the Wilmington office of the firm is the only lawyer individually named as a defendant in the complaint.
The case is Gielata v. Eisenhofer, 10-00648, U.S. District Court, District of Delaware (Wilmington).