GUSINSKY v. BAILEY

The settlement approved by the Supreme Court in this action confers "substantial benefits" on the company since it caused extensive improvements to the company's corporate governance and internal control policies, which provide material, lasting benefits to the company and its shareholders ( Seinfeld v Robinson, 246 AD2d 291, 294). Specifically, the reforms address the problems revealed in the company's stock option granting and accounting processes and deter future misconduct by management. The settlement requires that the company adopt procedures not previously in place, which could have prevented the backdating of options that occurred. Accordingly, we find that plaintiff's achievement of such results was sufficient to warrant an award of reasonable attorneys' fees and expenses under Business Corporation Law § 626 (e).

[ See 21 Misc 3d 1107 (A), 2008 NY Slip Op 52004(U).]