Henley Shareholders’ Attorneys Seek $5 Million

The attorneys who successfully brought a shareholder lawsuit against Henley Group Inc. stand to receive up to $5 million in fees and expenses, according to documents Henley filed this week with the Securities and Exchange Commission.

The plaintiffs’ attorney group, led by William Lerach, Keith Park, Stacey Mills and Joyce Fitzpatrick of San Diego, had filed suit in San Diego County Superior Court in October, alleging that a stock purchase plan for Henley executives was a “waste of corporate assets.”

The plan, approved at a Henley shareholders’ meeting last November, enabled about 25 top management personnel to buy $107 million worth of Henley shares with low-cost, 90% financing provided by Henley.

Henley and the shareholder group settled the suit July 20. In connection with the settlement, Henley announced on July 23 that it would launch a self-tender for 25 million of its own shares at $28 per share. Henley also agreed to reduce the number of shares available to executives through the stock-purchase program and to shorten the terms of the subsidized loans.

According to a statement filed with the SEC, Henley will not object to the plaintiffs attorneys’ application for up to $5 million in fees and expenses at a settlement hearing scheduled for September.

When the suit was filed last year, Henley Chairman Michael Dingman decribed it as the “corporate equivalent of ambulance chasing” and vowed to fight it in court. Under terms of the settlement, which precluded a court trial, both sides are now prohibited from commenting.