Top plaintiffs’ law firm sued for taking excessive payout in Tyco case

Published August 5, 2010 4:00am ET



You know it’s getting bad when the trial lawyers start suing one another.

From Bloomberg:

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.

The complaint, brought by Tyco investor Richard Gielata, is being pressed in the federal district court of Delaware by his son Joseph, an attorney formerly with the firm he is now suing.

Gielata alleges that Grant & Eisenhofer has broken a secret 2004 agreement with one of its clients in the Tyco fraud case (the Teachers Retirement System of Louisiana) not to seek more than 7.8 percent of any settlement to be dedicated to attorneys’ fees. The firm ended up seeking and receiving $464 million, or 14.5 percent of the settlement.