Perhaps no corporate scandal of recent years has created such wide-ranging troubles as the stock option backdating mess. Companies have spent untold millions on legal fees for independent investigations, government negotiations, and shareholder and derivative suits. And even if the companies clean house, the disgraced executives can and do insist that their former employers keep paying their high-priced lawyers, thanks to indemnification contracts that are a standard perk in executive suites.

In the case of Brocade Communications Systems Inc., which cut ties with its convicted former chief executive officer, Gregory Reyes, legal fees could eventually reach $100 million. Its securities filings show that as of July 28, it had paid about $65 million in legal fees. That figure is sure to balloon because it doesn’t include Reyes’ seven-week criminal trial, which began in June. The former CEO was defended by a flotilla of lawyers from Skadden, Arps, Slate, Meagher & Flom and Munger, Tolles & Olson. On Aug. 7 a federal jury in San Francisco convicted Reyes on all 10 counts sought by prosecutors.

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