Lawsuit claims attorneys cheated Tyco shareholders out of more than $200 million in settlement

Holder challenges lawyer fees in Tyco settlement

DOVER, Del. — An investor in Tyco International says attorneys who represented shareholders in a securities lawsuit cheated them out of more than $200 million.

The federal lawsuit in Delaware targets Grant & Eisenhofer, one of three law firms that won a $3.2 billion settlement for Tyco shareholders in 2007, one of the largest securities class action recoveries in history.

The attorneys were awarded $464 million in fees, or about 14.5 percent of the settlement.

But the lawsuit, filed by a former Grant & Eisenhofer lawyer on behalf of his father and other shareholders, claims the firm was limited by a fee agreement to no more than about 8 percent of the settlement.

Grant & Eisenhofer denies the accusations and says the lawsuit was filed by a disgruntled former employee.