Tesla shareholders are set to appear in court today to contest an unprecedented $7 billion legal fee request, stemming from a lawsuit over Elon Musk's $56 billion pay package.

The case, initially brought by investor Richard Tornetta in 2018, resulted in Musk's compensation package being voided in January. Now, Tornetta's legal team, including the firm Bernstein Litowitz Berger & Grossmann, is seeking a staggering fee that equates to roughly $370,000 per hour for the 37 lawyers and staff involved.

The request has sparked outrage among some Tesla stockholders, with over 8,000 individuals flooding the Delaware Chancery Court with approximately 1,500 letters and objections. Nathan Chiu, a shareholder from New Jersey, described the fees as "exceedingly disproportionate and outlandish" in a letter to Chancellor Kathaleen McCormick.

Tornetta's lawyers argue that the fee is justified, representing about 11 per cent of the benefit they claim to have secured for Tesla – namely, the return of around 266 million shares reserved for Musk's stock options, valued at approximately $67 billion based on recent share prices.

However, the landscape shifted dramatically in June when Tesla shareholders voted to ratify Musk's pay package. The company now contends that this vote has effectively nullified Tornetta's legal victory, arguing that the shareholder lawyers should receive no more than $13.6 million.

The fee request far surpasses the current record in shareholder litigation – $688 million awarded in an Enron class action. It has prompted formal objections from some shareholders, including pilot Amy Steffens and attorney Kurt Panouses.

Chancellor McCormick may take several weeks or months to rule on the matter. The decision could be influenced by a pending Delaware Supreme Court ruling on a $267 million fee request in a separate case involving Dell Technologies.

The hearing, scheduled for Monday, has been moved to the largest courtroom in the building to accommodate the 47 attorneys from 19 law firms involved in the case, as well as potential stockholders wishing to attend.

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